Redfin Pushing Own Inventory
I noticed Redfin has done some updating to their website design. In addition to properties placed on ‘cards’ in the map view, Redfin appears to have fully defaulted the ‘Recommended’ listings to that of their own. The question is, why did it take them this long?
Protect Your Own
As its own brokerage, Redfin has some unique abilities its public rival Zillow cannot claim, namely, it can afford to alienate some non-Redfin brokers by pushing its own listings. With a 1% listing fee and excellent technology, this is a powerful combination, and one that the company obviously hopes will lead to more business.
As a seller, does this help incentivize me into listing with Redfin, knowing that it will likely put my home in front of that many more eyes? Does it make the trade-off with using a more experienced, higher-touch service agent more palatable?
I’d be curious to know how effective this technique is by clicks and click-through-rates. I suspect it’s meaningful.
Another Differentiator from Zillow
Zillow, as an advertising company, does not have the flexibility to promote listings in such a manner. The company’s Premier Agent program does this, instead, by promoting agents (affording opportunities for the company to acquire revenues from both buyer’s and seller’s agents looking to advertise). Redfin monetized the broker business, Zillow monetized it’s website and app traffic.
It would be interesting if Zillow allowed agents to pay more to have their listings featured, but this pay-to-play is generally frowned up and again, is detrimental to consumers who are looking for an unbiased resource. Then again, it’s not unprecedented.
HomeFinder, a home search portal that’s been acquired by Placester (getting with it OpenHome Pro, the leading open house registry app), actively promotes this as a benefit to sellers who wish to list their home directly with HomeFinder (a la For Sale By Owner), in exchange for a monthly fee of $39.
The challenge for HomeFinder is to convince sellers that HomeFinder is a preferred destination for home buyers, which when compared to Redfin and Zillow, it is not.
How Far Could Redfin Take It?
To how far an extreme could this work? The lifeblood of brokerages is leads, which are born from traffic. Redfin cannot go so far as to show exclusively Redfin listings, but could they create a sort of sneak peek, a la what Compass is trying to do? Redfin, and most, already display ‘coming soon’ listings but could this be held out to be a more exclusive environment for Redfin listings?
Could Redfin monetize consumers by charging them in order to view exclusive Redfin listings? Unlikely. What’s more likely is less explicit. The brokerage could simply ramp up marketing in its largest markets, promoting the 1% listing fee and it’s technology to drive more sellers to use its services, and continue to market the fact that those listings will be featured on Redfin’s platform, the most visible brokerage platform in the country.
For now, the impact is minimal, but we’ll be monitoring how Redfin attacks market share over the next 12–24 months and the ripples it sends throughout the industry.