Redfin, which is looking to raise up to $100 million in its public offering, said customers of Redfin Now will “typically get less money for their home than they would listing their home with a real estate agent, but get that money faster with less risk and fuss.”
“We believe our industry-leading algorithms for calculating what a home is worth will limit the risk that the price we pay a Redfin Now customer for her home is below the price we charge a new buyer for that home,” the company wrote in the filing. “And we believe our ability to reach more than 20 million monthly average visitors through our website and mobile application, coupled with our network of Redfin buyers, will let us effectively resell the homes we purchase through Redfin Now.”
Redfin began testing the service with a limited number of customers in two markets during Q1 2017. It is technically a subsidiary of Redfin — RDFN Ventures, Inc. is the official name — which is similar to what the company does with its mortgage and title businesses. Redfin reported no revenue from the service through March 2017. The company declined to provide more details about Redfin Now when contacted by GeekWire.
Redfin rival Zillow, which went public in 2011, launched a similar service last month designed to speed up the transaction process called Instant Offers, which connects homeowners to offers from investors as well as a comparative market analysis (CMA) from a local real estate agent.
Other companies such as OpenDoor and OfferPad also offer competing services that streamline every step of the home-buying and selling process. OpenDoor, started by former Square COO and PayPal executive Keith Rabois and Movity.com founder Eric Woo, has raised $320 million and operates in four markets: Phoenix, Dallas-Fort Worth, Las Vegas, and Atlanta. The company makes money from fees after buying homes directly and selling them.