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The real estate company Redfin is testing a feature that will allow buyers to bid on real estate via the company's website, according to The New York Times. It is a movement that is part of a trend in the real estate sector that could upset the traditional market.
The program appears to be a revival of a feature launched by the company more than a decade ago: Redfin Direct, which it called "the first online home buying service" in 2006. This function consisted of a series of Online forms Buying a home was made easy online, but "it did not work", according to the Time. The new version recently launched in Boston allows buyers to submit an offer to buy on a house. Sellers who accept an offer would then pay a 2% commission to the company, which the Time notes represent "about half of normal costs in the region". Redfin says that between March and May, five homes (out of the 120 listed on the Boston market) were purchased online.
CEO of Redfin, Glenn Kelman, told the Time that the program will be extended to the rest of the country. "We will expand one market at a time." He notes that more and more buyers are looking for homes on the Internet via sites like his, and that he feels that it's time to start offering the opportunity to buy from online houses.
The report comes one day after another from the Time on how Silicon Valley companies are looking to deepen their research on the real estate market. Sites such as Zillow and Trulia have long been supplying real estate listings and are now looking to offer more to customers, using their data to provide more accurate house values and data, and in some cases homes themselves. .
According to this report, Eric Wu, CEO of Opendoor, "you should be able to sell a house in a few clicks". OpenDoor and Zillow recently took the initiative to buy homes for sale directly to customers using their own agents. The report also notes that traditional real estate brokers such as Century 21 and Coldwell Banker are considering launching their own online options to buy homes.
However, the report notes, buying a home is a much more complicated – and costly – proposition than hailing a carpool service or placing an order. Kelman notes that companies buying homes "without having a clear idea of how you will make money on almost every home" could jeopardize housing markets. Despite Redfin's new program, the home buying process seems to remain complicated.
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