Redfin is starting to look more and more like a traditional real estate company — the type of firm that it initially set out to upend a decade ago.
The latest examples: The company just announced that it is opening a sales office in Ballard, next to the Solo Lofts condominiums, which it plans to represent through its newly-created Redfin Builder Services unit.
In addition, the company has started sending a new type of direct mail campaign to potential customers, one which features a local agent and neighborhood information. The version we saw featured an agent, and the home he sold, along with the savings the customer received through Redfin.
Redfin spokeswoman Jani Strand said that they’ve experimented with direct mail four a couple years, but the new marketing pieces that started arriving in certain areas in Seattle and Washington D.C. utilize a different approach.
“If it’s successful, we’ll consider rolling it out to additional markets,” said Strand. “It’s too early right now to evaluate the performance.”
It’s certainly not lost on us that Redfin is starting to look more like a traditional real estate company, embracing age-old marketing and sales tactics, like direct mail and a brick-and-mortar retail presence. Those are pretty low-tech approaches, and signal that Redfin realizes that it needs to hit customers at various points, not just online.
Over the years, the company also has boosted its prices, reducing the rebates it gives to home buyers while increasing hands-on services such as in-person home tours. All of those changes have slowly pushed Redfin away from its iconoclastic online roots, putting it more in line with traditional firms.
But the changes have also paid dividends, with nearly all of the company’s markets operating at a profit. In an interview with GeekWire in November, CEO Glenn Kelman said the company no longer loses money every time it sells a house, something it did in the early days when Kelman was touting on 60 Minutes that real estate was the “most screwed up industry in America.” (Kelman later said his “swashbuckling statements” about the industry were a mistake).
“We’ve gotten more efficient. We’ve charged more. We have found the balance,” Kelman told us in an interview in November. And while those changes — along with things like direct mail and sales offices — make Redfin appear more like other real estate companies, Kelman still thinks there’s something special about the company.
“There is all this talk in real estate about revolutionizing the industry for consumers, but I think we are one of the only ones that is really serving the consumer with such a single-minded focus,” he said.
Redfin also is in the midst of change, potentially getting ready for an initial public offering following a $50 million venture capital round last month. The company has started expanding its geographical reach again, setting up operations in Rhode Island, San Antonio and Minneapolis in the past two months.
Now, this will be the really interesting thing to watch. How will Will Wall Street perceive Redfin? Just another real estate firm or a budding Internet superstar?