Real estate company Redfin has been testing a feature that will allow home buyers to place a bid on a property via the company’s website, according to The New York Times. It’s a move that is part of a trend within the real estate industry that could upend the traditional marketplace.
The program looks to be a relaunch of a feature that the company debuted over a decade ago: Redfin Direct, which it touted as the “first online home-buying service” back in 2006. Then, the feature was an online series of forms that facilitated home-buying purchases online, but “it went nowhere,” according to the Times. The new version recently launched in Boston, allowing buyers to submit a bid on a home. Sellers who accept an offer would then pay a 2 percent fee to the company, which the Times notes is “about half of the normal fee in the area.” Redfin says that between March and May, five homes (of the 120 listed in the Boston market) were purchased online.
The program launched in Boston, and will ‘expand one market at a time’
Redfin CEO Glenn Kelman told the Times that the program will expand to the rest of the country. “We’re going to expand one market at a time.” He notes that more buyers are searching for homes on the internet through sites like his, and that he felt that it was time to start offering the option to buy homes online.
The report comes a day after another from the Times about how Silicon Valley firms are looking to dig further into the real estate marketplace. Sites like Zillow and Trulia have long provided real estate listings, and are now looking to offer more to customers, using their data to deliver more accurate home values and data, and in some cases, even homes themselves.
That report cites Opendoor CEO Eric Wu, who says that “you should be able to sell a home within a handful of clicks.” OpenDoor and Zillow have recently taken the step to buy up houses on their own to sell them directly to customers using their own agents. The report also notes that traditional real estate brokers like Century 21 and Coldwell Banker plan to launch their own online options to buy houses.
But, the report notes, buying a home is a far more complicated — and expensive — proposition than hailing a ride-share service or ordering out. Kelman notes that companies that buy up houses “without having a clear idea of how you’re going to make money on almost every single home,” could put housing markets at risk. Despite Redfin’s new program, the home-buying process looks to remain a complicated process.