July 17, 2008
A lot of our customers ask what’s different about buying new construction.
First of all, you’re buying from the person who built it, not the person who called it home. Often, the property is just one of many they are trying to sell.
We asked our agents who specialize in new construction for the most important things to consider when buying a new house or condo.
1. Hire an agent
One that specializes in new construction and isn’t affiliated with the builder.
2. Be creative during negotiations
Builders don’t like to drop their prices. Instead, ask them to cover closing costs or upgrade the kitchen for free.
3. Get it in writing
Don’t sign until everything has been negotiated, agreed upon and written into the contract.
4. Be wary of upgrades
They’re where builders make the most profit. Don’t take upgrades you don’t want or can’t afford.
5. Research the builder
Visit other developments and talk to home-owners. Google the developer for reviews, testimonials and news.
6. Ask for a guarantee
You’re often buying a home that is not completed. What guarantees do you have the home will be ready on time?
7. Get the home inspected
New homes have problems too. Hire an inspector to make sure everytthing is safe and up to code.
8. Bumper-to-bumper coverage
New homes should come with a warranty from the builder. Know what is and isn’t covered and for how long.
9. Look to the future
Check with the city to see what is planned for the surrounding area. If you have a view, will it still be there in 5 years?
10. Find your own lender
Don’t use the builder’s lender. Shop around for the loan that is best for you, not them.
This is our list, but what do you think? If we’ve missed something, leave a comment.
Photo credit: SqueakyMarmot on Flickr.
July 9, 2008
In our last release we added a “Share on Facebook” link to our details pages that when hovered over brings up a menu from AddThis letting you bookmark the home to your favorite social bookmarking service.
Before launching the feature we debated what the top service would be. Glenn, voted for Delicious, I voted for Facebook. In fact I thought Facebook would win by a long shot which is why we used the text “Share on Facebook” instead of something more generic like “Share on…”
Curious who won the bet we used the AddThis analytics feature to settle up. Here’s a breakdown of how many times the various services have been used:
Of course, maybe the fact that the link specifically calls out Facebook is the reason it is the leading bookmarking service :).
Here’s a breakdown by day.
In our next release we’ll add a Facebook icon in front of the link to increase its discoverability.
Big thanks to Dan, for pushing us to use AddThis.com, instead of adding only a Share on Facebook link.
July 3, 2008
Lots of prominent venture capitalists, including Fred Wilson and now Bill Gurley, are writing this week about the dearth of IPOs first reported by Matt Richtel in the New York Times. This quarter was the first since 1978 that a venture-financed company didn’t go public.
But the real headline isn’t the dearth itself, but the fact that some of the smartest people in VC are fine with it. It’s like the PGA moved the Masters to a pitch-and-putt, and Tiger Woods applauded the decision.
The argument goes that a public company just isn’t a worthwhile aspiration anymore for Internet or software companies, in large part because of a lions-tigers-and-bears litany of regulations that the National Association of Venture Capitalists is asking everyone to complain about. Bill cites 15 (holy cow!) companies in Benchmark’s portfolio with more than $50 million in revenues, all still private.
“I don’t think we have a demand problem, we have a supply problem,” Bill writes. “No one wants to manage a public company.”
This is a pleasant conceit, that all of us could manage a public company if only we wanted to. But the real supply problem is how many companies can — not how many want to — grow into large, profitable, stand-alone businesses.
In this respect, Bill chose the wrong threshold for companies that could go public. At $50 million in revenues, you would be spending 2 - 4% of revenues (roughly $1 - 2 million per year) on the costs of being public. That doesn’t sound good.
But how many Web 2.0 companies today have a chance of reaching $100 million in revenues, then $500 million? Maybe we have the next Google, eBay, or Amazon among our ranks now. If so, I doubt the new regulations are enough to deter them from growing into public companies.
Characterizing folks who cash out as just smarter or more realistic than those who want to build a stand-alone business seems just as misguided as the 90’s macho insistence on an IPO for its own sake. There are some businesses where M&A makes more sense, and others that can prosper on their own (forget the companies so disruptive or weird that few companies will want to buy them).
M&A today is just a different game of the musical chairs we played in 1999. Who is going to be left to buy technology companies if technology companies stop going public? It can’t just be Google and Microsoft, Yahoo, AOL and IAC forever.
That means we have to keep building business to be businesses, not just to get bought. There are plenty of entrepreneurs who, if they could grow a business to $100 million and beyond, would prefer to keep building it rather than get acquired. The hard part for us isn’t the regulations, it’s getting past $100 million, which takes patience, big thinking, and a huge appetite for risk.
When brilliant folks like Bill Gurley and Fred Wilson start giving up on that project, it’s time for high-tech to get its mojo back.
June 30, 2008
Redfin surveys people every day, all day: when they tour homes, when they make offers, when they cancel listings, when they sell their house. It’s how we decide what to pay our agents, and how we figure out when we’re screwing up.
But for every thousand visitors we get to our site only a few end up buying or selling a home — or getting a survey — from Redfin. So what’re the rest of you up to? Good question. Every summer, we survey the silent majority, asking how they heard about us and what they think of us. This time, 199 people completed the survey in the space of two weeks, clicking a link on our main map page. As promised, we’re letting you know about some of the results.
First off, the biggest source of visitors for Redfin is word-of-mouth. When we asked people how they heard about us, 35% said it was from a friend, who had either bought or sold a home through Redfin (6%), or just used our site for search (29%).
June 2008 Redfin Visitor Survey: How Did You Hear About Us?
The big difference between this year and last year was that we’re getting more of our traffic from Google search. If you compare this year’s responses to those from our last visitor survey, in August 2007, you can see that the contribution from Google and other search engines had been pathetic:
August 2007 Redfin Visitor Survey: How Did You Hear About Us?
The surveys reflect the growth of Google-originated traffic but our analysis of our logs show search-driven traffic increasing even more dramatically, accounting for about a third of our traffic growth, which has been 15 - 20% month over month. We still don’t feel like we’re doing a great job optimizing for search, but we’re getting better.
What Visitors Know About Redfin, What They Care About
Next, we asked people about their awareness of key Redfin facts, such as the nature of our business (we’re a real estate brokerage), the extent of our service (we handle negotiations and contingencies through closing), and how our process works (we talk with our clients before you are committed to any particular transaction).
The fact that visitors were most aware of was our commission refund, which just goes to show that how we think of ourselves (a fanatical customer service company) is different than how others see us (as a way to save $10,000):
June 2008 Redfin Visitor Survey: Awareness of Key Redfin Facts?
Consumers seemed especially unaware (21% said this was clear & understood) that our agents must have experience with 20+ transactions before representing a client, while only 9% knew that our agents earn between double & triple the industry average. Other facts that only 1 in 5 customers knew about:
Then again, 18% of Americans believe the sun revolves around the earth. OK, now here’s what visitors considered to be “the most important” Redfin facts:
June 2008 Redfin Visitor Survey: Importance to You of Key Redfin Facts?
The fact that we talk before you’re committed to anything, that our customers are happy, that we negotiate a good deal — all of these things were almost as important as the commission refund. If you combine these two graphs, to see what facts people care about that they didn’t previously know about, it turns out that our negotiating advantage and customer satisfaction ratings are the most under-marketed aspects of Redfin’s service…
So we’ll do our best to get the word out about our customer results…
Many thanks to all the folks who filled out our survey, and congratulations to respondent lfischer46… you won our prize of a $250 Apple gift certificate, which we’ll be mailing to you today.
Questions, comments about the survey, please let us know!
June 26, 2008
Here in the wee hours of Thursday morning, Redfin is opening for business in Chicago. It’s our eighth market, but the first new one in nearly a year. And our fourth major release in the last five months.
I hadn’t realized until this week how much we’d all missed expanding. Over the winter, we got a little chicken about opening new markets. But the requests for us to come to Chicago kept piling up (more than 1,200!). And, as nearly all of our markets slid back into the black, our expansion mojo has come back too.
Mark Reitman, who helped beat back an Illinois anti-rebate bill this winter, is running Redfin Chicago. Redfin veteran Rachelle King is coming out from Seattle to get us off to a flying start.
Redfin Search Available Across Most of the States We Serve
And we aren’t stopping there! In fact, the new website increases by nearly 40% the number of homes you can search from Redfin.com, in far-flung parts of Washington, Virginia, Maryland, Massachusetts and Illinois, over 100 new counties in all. We’ll probably never have agents in any of these areas, and so we have no way to make money directly from this traffic today. But we hope that a more national presence will drive more people to our brokerage in the urban centers, too.
And in any event, opening up Redfin Search is a big deal for consumers, a sort of rural electrification project but with real estate data. Because we aren’t just talking about any old YAREW (Yet Another Real Estate Website) coming to Peoria. We’re Redfin dang it! And that means the real-deal MLS listings, with price history, tax records, past sales, days on market and all sorts of other information that far-flung consumers sometimes struggle to get on their own.
Google Street View and Microsoft Bird’s Eye, All In One Site
Meanwhile, we keep striving to make Redfin Search better. The Chicago-version of the site features Google Street View alongside Microsoft Bird’s Eye imagery, so you can zoom aro
und most listings from different perspectives, for a complete portrait of a neighborhood or a property. I think we’re the first ones to do that.
We’ve also fixed up how we search for bank-owned properties. Sue McAllister of the San Jose Mercury News had previously complained that we allowed her to search separately for those bank-owned properties not yet listed in the MLS, but that we didn’t also highight the bank-owned listings that already are in the MLS. Good bust Sue! We fixed that this time around. You can ask for bank-owned listings in the MLS or straight from the bank.
What else? You’ll notice the site now works with Firefox 3.0, a compatibility gap that this whole last week had been embarrassing us. And the details we bring up for each listing should be a lot zippier, too.
Check out the new site, play with the new imagery, see what $1,000,000 buys you along Lakeshore Drive, and by all means tell us what you think!
First photo credit: Today is a Good Day, Flickr
June 24, 2008
Being on TV is a junkie kind of rush. Even if you’re as stuck up as I am about it, you fall into hoping TV’s magic will transform you during the broadcast into something larger than life. But then you get airbrushed with make-up (new for HD, it feels soft and good), the mic-man publicly undresses you to the navel a minute before the segment starts, and you’re rushed off the set in another two minutes feeling more, not less, inconsequential. 
Redfin was on Fox & Friends’ segment this Sunday to talk about our business model (save $10,000!) and to answer the usual questions (we’re not putting anyone out of business). At the end of it I felt a little blue. I walked through the saddest place on earth, a darkened “Geraldo!” set. The streets in midtown Manhattan were empty at 7:30 a.m. I answered an email from a lone Connecticut fan wondering about our expansion plans. I called my mom, and told her my day felt already over. I remembered that a 60 Minutes producer — he was such a prince — once said “everyone is always depressed after the interview.”
Then I got on the 1 subway uptown… and saw people in tank-tops and bibs. A race!
I got back to my room, changed, and ran to Central Park, in what I only then realized was an event for disabled & able-bodied people alike (registration fee paid later).
As usual for Manhattan, folks lined up for the seven-minute-a-mile pace who would almost immediately begin walking, leading to altercations with punier, faster runners. There was a small-voiced, encouraging speech by New York Road Runner’s president Mary Wittenberg and, from the beginning — and all the way through — there was cheering. I LOVE people cheering! Why don’t we do that more often?
And there were so many runners -– I had not thought there could be so many — competing on prosthetic legs, of an age that many must have been injured in Iraq. A large, magnificently muscled man running outside the lane and against the current was yelling, Marine-style: “UP AND OVER, UP AND OVER, COME ON.” It was good to see some of the vets running together. We can never re-pay them. It’s hard not to be almost-scared of the intensity of their experience. But everyone on the course was glad to be doing something with them.
A few racers ran arm-in-arm with their parents, very close to one another, some encouraging me though I should have been the one encouraging them. Melted make-up streamed down my face. And perhaps because I was deranged from trying to run faster than I really could, or because of the cheering, I was overcome with love.
June 22, 2008
Redfin is appearing on Fox & Friends this Sunday. The “hit-time” is 7:21 a.m. At the moment, I’m in the green room. There is nasty danish here. Redfin is set to air just before a segment on “the world’s ugliest dog.” One of the make-up people in the green room just saw the teaser and said “that dog isn’t THAT ugly.”
Then the room fell silent as the camera swiveled to show a dog that was, for all of its many winning characteristics, very, very ugly. I was glad to see the studio had a recycling bin, but then noticed it was full of garbage. There are many TVs here, ostensibly for piping in news, but the set to my left is showing the original “Planet of the Apes.” I asked the green-room guy who his favorite star was. He said Jerry Springer is “very down-to-earth.” He also liked T.O. “Was he down to earth?” “No,” he said, “I guess not.”
June 21, 2008
There was a fire in the Seattle-based data center that Redfin uses to host our web servers, causing a loss of service between approximately 5 a.m. and 10 a.m. Pacific Time. The entire data center was shut down by the fire department, including universal power supplies. Thanks to Redfin’s Chris Neitzert and his team, the site is now up and running. Throughout the interruption, our agents have of course stayed at their posts working with clients. But as the data center installs new equipment, it is possible that we will experience much-briefer interruptions in our website service around midnight tonight. We will continue to be available by telephone at 877-973-3346 or through the direct number our clients have for their agents.
For now, we apologize for the interruption in our service.
June 19, 2008
There’s a juicy conversation about short sales on Redfin’s Bay Area Forums, from the rare bird who successfully completed a short sale (which is when you buy a home for less than what is owed on the mortgage, requiring bank approval) in Pittsburg, California. He explains what it takes to win:
- Be promiscuous: I think most importantly, don’t come in expecting to get your first choice. Or your second. Or even your third. We made offers on four houses and were preparing to make an offer on a fifth when the third one finally came though. It’s kinda hit or miss with the banks, which are inundated with foreclosures and short sales…
- Don’t expect the pick of the litter: I had to change my mindset away from finding “the perfect house” to finding “a house we could live in” and then making offers on several houses before we finally got one.
- You don’t have a deal ’til the bank gets an appraisal: We made an offer (at the asking price), the bank then had the property “appraised” and counter offered, then we increased our offer $10k, and that was accepted after a few weeks.
- How long it takes depends a lot on the lender: I believe that different lenders are getting slammed with these short sales at different rates, and some banks are better equipped to deal with short sales than others.
Not earth-shattering rocket science, and we would suggest you could save yourself some time on all those offers by checking out how many banks have to approve the deal and how long they have to do it before the foreclosure auction — but for all the talk about short sales, someone who has actually closed on one is sometimes hard to find.
June 18, 2008
Redfin just showed up in a big USA Today feature which reports that “a growing number of home buyers swear by Redfin, an online start-up in Seattle that has rocked the real estate market.” All day, our phone has been ringing off the hook.
And this time ’round, none of the calls have been nasty! After touching on The Department of Justice settlement with the National Association of Realtors, the story emphasized our often-convoluted but sincere efforts to get along with other brokers, and their efforts to get along with us. 
And then a few hours after the article was published, one of our customers chimed in on the USA Today site with his own perspective:
A great idea is one thing, putting it into practice is another. I actually used Redfin to close my first housing purchase well over a year ago. I got great hands-on experience. My Redfin agent was busy at 10pm one night putting in an offer for me because we were in a multiple bid situation and time was running out. Her expertise drafting an escalator clause really paid off. They also sent someone to the property to help coordinate an emergency inspection (one day after the house was on the market). We ended up getting the house and were happy with the service. The best part is that I never felt “sold” or wondered about Redfin’s agents motivation (conscious or subconscious).
Cynthia said it sounds suspiciously like something we would write about ourselves, but it’s the real deal. (If you want to keep up with all of Redfin’s daring exploits, including our discussion of low-ball offers in Newsweek or short sales in The Washington Post earlier this week, just check out our del.icio.us feed.)
