Redfin Brings Transparency to Title, Inspection, Mortgage, Staging

Big news! Today, Redfin is launching a major expansion to our charter as a technology-powered real estate broker: Redfin Open Book, a local reviews site for lenders, inspectors and title companies.

Later this spring, we’ll add the stagers, landscapers and handymen used by sellers to get their home on the market.

Our goal is to ensure our customers get the best service at every step of a deal, by bringing together the best local team and holding that team accountable for the best result.

The Goal: Better Service
Unlike Angie’s List, Open Book is completely free. And unlike Yelp, it’s completely focused on the folks who serve our customers when buying or selling a home.

There are no kickbacks from anyone we include or recommend. In fact, there’s no revenue model at all for Open Book, not now nor in the foreseeable future.

The goal is simply better customer service. The best real estate agent in any market is good because of her own skills, but also because of her team, and her ability to hold that team’s feet to the fire when a loan or a listing is on the line.

As Redfin’s online traffic and transaction volume grows, our influence over all the folks who provide real estate services grows too. We want that influence to lead to better performance across the board for our customers.

This means that our focus is quality, not quantity. We don’t want to be the phone book, showing every lender or inspector in town. We want to be a reliable guide to the partners you should actually use, in any market we serve.

Today, people mostly take their agent’s recommendation for an inspector or a lender. But we think customer recommendations are important too, in finding an inspector who will tell you when to walk away from a crumbling house, or a lender who will steer you toward a cheaper loan, even if it pays him less.

This is crucial information, which is why Open Book, while intended for our own customers, is available to everyone browsing our site.

Our Advantage: Redfin-Certified Reviews
No one else could build such a reliable reviews site for real estate vendors.

Because we honcho a transaction the whole way through, hundreds of times a month, we know which inspectors and lenders our customers are using. Redfin’s online Deal Room, for tracking who is supposed to do what to close on time, stores information about thousands of vendors in a big database.

And we already survey every customer, deal or no deal, so it’s easy to ask each customer about his lender, inspector or stager. This means that we can validate every review, to avoid the bogus reviews from vendors’ friends and competitors that plague most review sites.

At some point, we’ll probably solicit reviews from the general public, but we’ll always highlight the reviews that came from actual customers, just because we can verify that the customer did in fact use the vendor she’s reviewing.

Our Investment: Redfin-Certified Partners
As with our brokerage, we aren’t just offering technology; we also offer a human touch. The inspectors, lenders and stagers who get the best reviews qualify for an additional level of certification, as Redfin partners.

Redfin has hired a team of former Redfin agents to interview potential partners, briefing each one on Redfin’s mission and our service expectations. We then monitor the partner’s performance. The ones that make the grade are certified as official Redfin partners. In Open Book, a tiny Redfin ribbon appears beside their profiles.

These are the folks our agents are most likely to recommend to our customers.

Over time, we’ll ask each certified partner to deliver premium service to our customers. This may entail attaching digital photos to an inspection report, or offering to refund the inspection fee if an unexpected repair crops up within 60 days of the closing.

We expect to drive plenty of customers toward our partners; if history is any guide, we’ll have to be careful to ensure no one gets overwhelmed.

And of course we’ll also be careful to strike a balance between ensuring our partners build a profitable business, and giving Redfin customers premium service. Inspectors, stagers and lenders who want to apply to be a certified partner can email us at openbook (at) redfin (dot) com.

Where We’re Starting: Washington DC and the San Francisco Bay Area
For now, the reviews are available only in the Bay Area and Washington DC.

To find Open Book, just click the “Buying” link at the top right of any page on Redfin.com, and choose “Open Book” from the menu. As we capture more reviews in the coming months, we’ll launch Open Book in more markets, for a wider range of services.

Mid-Peninsula Madness!

It’s always pretty crazy in the mid-Peninsula, but these last couple of weeks have been INSANE! Palo Alto and Menlo Park are the hub of all this activity:

• South Palo Alto: On this $1.1m, ~1,100 sq. ft., 3 beds, 2 baths home, there were 16 offers. It went to an all-cash, no contingencies offer.
• South Palo Alto: On a $950k, ~1,100 sq. ft., 3 beds, 1 bath property, there were another 16 offers, and more than one was all-cash. It went to an all-cash, no contingencies offer.
• Menlo Park/Alameda Area: On a $1.2m, ~1,400 sq. ft., 3 beds, 2 baths home, the seller took a lower offer than the top, but it was an all-cash buyer with no contingencies and 3 free months of rent back.
• Menlo Park/Flood Park Area: On a $1.2m, 1,890 sq. ft., 4 beds, 2 baths home there were eight offers, and it went to an  all-cash, no contingencies offer.

What I’m telling my clients now is to write a nice cover letter to the seller, and to use a local and reputable lender. And, if at all possible, win the lottery.

Sellers Still in Control in San Francisco

The name of the game is fast sales in San Francisco, and buyers and sellers are both playing. There are plenty of qualified buyers – they are just looking for great deals. Sellers especially seem more dedicated than ever to sell so they can either start over and buy something less expensive or avoid a short sale or foreclosure. Both the data and our experience are saying that there is still a lot of real estate to choose from and deals to be had!

Sales Drop More Than 40% in January

The seasonal drop in reported sales has landed hard in San Francisco. There were 297 sales of single-family homes, condos and townhomes in San Francisco, representing a sharp decrease of 41.7% since December 2011 and a drop of 18.6% since January 2011.

San Francisco Median Sale Price Jumps 4%

The median sale price for a single-family home in San Francisco was $619,000, up 4% from December 2011 and up 3.3% year over year from January 2011. The per-square-foot price didn’t do as well, down 1.4% month over month and 6.4% year over year.

Supply Bounces Back from December Low

January showed it’s still a seller’s market in San Francisco, but not as pronounced as in December. There were 312 single-family homes for sale in San Francisco at the end of January, a 3.3% increase over the previous month, but still a 41.6% drop from January last year.

Given the pace of sales and the number of homes on the market, it would take 2.6 months to sell through the current inventory, a term known in the industry as “months of supply.” In a market balanced between buyers and sellers, we’d expect to see 5-6 months of supply, so this represents a strong advantage for sellers in San Francisco, but still a significant jump from December’s 12-month low in months of supply.

Redfin’s housing market data combines public records, local multiple listing services, for-sale-by-owner and other verified sources. The data is validated by Redfin analysts to ensure it is comprehensive and accurate. Redfin publishes these reports each month on or around the 10th of the month, for the previous month. As a tech-focused broker, Redfin is the only company with access to this level of data.

Case-Shiller: Another Winter for Home Prices

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). The Case-Shiller data is generally considered to be the most reliable measure of overall home price changes for a region, since they only consider repeat sales of homes when calculating their index, instead of looking at all the homes that sold in a given month.

For the full source data behind this post, hit the S&P/Case-Shiller website. For a more detailed explanation of how the Case-Shiller Home Price Index is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – November data is released in January).

Here are the basic Case-Shiller stats for the Bay Area* as of November:

Nineteen of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between October and November (the same as between September and October): Only Phoenix saw an increase, for the second month in a row. This month Chicago bumped Atlanta out of the bottom spot, falling 3.4% in a single month.

Here’s a look at the latest local tiered data, back through 2000:

And here’s a closer look at the recent changes, with the vertical and horizontal axes zoomed in to show just the last year:

The Bay Area’s middle and high tiers fell in November, while the low tier inched up. Month to month, the low tier was up 0.2%, the middle tier fell 1.6%, and the high tier decreased 1.0%.

In this next chart, I’ve visualized the month to month trends of all twenty Case-Shiller-tracked cities. Green and above the horizontal axis if they were increasing in the month charted, red and below the axis if they were decreasing. I’ve excluded 2000 through 2004 since they looked largely the same as 2005 (mostly green).

Just five months ago, all twenty cities saw month to month gains. Now just one is not the red.

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