Redfin and Zillow executives recently attended an event in Washington D.C. to explain their motivations to work with consumers directly to buy and sell homes. The event, hosted by the Department of Justice and FTC, focused on competition in the residential real estate brokerage industry.
Redfin got into direct home sales a little more than a year ago with Redfin Now. CEO Glenn Kelman said their main motivation was to provide easy credit for consumers.
Zillow recently expanded their Instant Offers program, listing its first home in Phoenix last month. CEO Spencer Rascoff said their goal is to expedite the buying and selling process for homeowners willing to pay a small fee.
- Zillow and Redfin execs sat down to discuss competition in the residential real estate brokerage industry
- Both companies got into direct home sales recently with programs like Redfin Now and Zillow Instant Offers
- Zillow and Redfin had different motivations to start buying and selling homes directly
Both Zillow Group and Redfin have evolved from just trying to simplify residential real estate, to controlling the process from start to finish by buying and selling directly to consumers. But the Seattle real estate rivals arrived at this destination with different motivations.
Kathleen Philips, Zillow’s chief legal officer, says she was skeptical when Zillow jumped into home buying and selling through the expansion of its Instant Offers program. However, she quickly learned there was a significant demographic that would rather take a little less money on a sale for the convenience and certainty of completing the process quickly.
Zillow listed its first home for sale in the suburbs of Phoenix last month. It paid $410,000 for a house it is looking to sell for $425,000. Zillow CEO Spencer Rascoff has said the company’s goal is not to make a ton of money on each and every home but to target small profits on a huge volume of sales.
More than a year after launching Redfin Now, the company recently expanded the amount of home value it is willing to keep on its books from $10 million to $25 million.
Redfin CEO Glenn Kelman said a primary drivers for his company’s entrance into direct home sales was the lack of access to credit for consumers. Kelman says his company, through Redfin Now, has basically become a bridge for buyers from the old home to the new one.
View the original article at Geek Wire