The real estate company Redfin has been testing a feature that will allow home buyers to bid on a property through the company's website, according to The New York Times . It is a movement that is part of a trend within the real estate industry that could overturn the traditional market.
The program appears to be a relaunch of a feature that the company debuted more than a decade ago: Redfin Direct, which was touted as the "first online homebuying service" in 2006. Then, the feature was a series online forms that facilitated the purchase of homes online, but "went nowhere," according to the Times . The new version, recently launched in Boston, allows buyers to submit an offer for a home. Sellers who accept an offer would then pay a 2 percent fee to the company, which the Times notes is "approximately half the normal rate in the area." Redfin says that between March and May, five homes (of the 120 listed in the Boston market) were purchased online.
Redfin CEO Glenn Kelman told the Times that the program will expand to the rest of the country. "We are going to expand one market at a time." He points out that more buyers are looking for houses on the Internet through sites like his, and that he felt it was time to start offering the option to buy houses online.
The report comes day after day from Times about how Silicon Valley companies seek to deepen the real estate market. Sites like Zillow and Trulia have always provided real estate listings, and are now looking to offer more to customers, using their data to deliver more accurate values and housing information and, in some cases, even the houses themselves.
The report quotes Opendoor CEO Eric Wu, who says "I should be able to sell a house in a few clicks." OpenDoor and Zillow have recently taken the step of buying houses on their own to sell directly to customers who use their own agents. The report also notes that traditional real estate brokers such as Century 21 and Coldwell Banker plan to launch their own online options to buy homes.
But, according to the report, buying a house is a much more complicated and expensive proposition than hiring a shared-car service or placing an order. Kelman points out that companies that buy homes "without having a clear idea of how you're going to make money in almost every home" could put housing markets at risk. Despite Redfin's new program, the home purchase process seems to remain a complicated process.