U.S. based online real estate brokerage coming to Canada
Mario Toneguzzi
REM
Another big U.S.-based online real estate brokerage is launching in Canada, selling itself as a more affordable way for consumers to buy and sell homes throughout the country.
Redfin, which is based in Seattle, will open in Toronto and Vancouver by March and it plans to expand to other major Canadian markets once it has established itself north of the border.
Glenn Kelman, CEO of Redfin, said the technology powered brokerage will have its own agents working in the offices with a mission of delivering the best customer service possible.
“It’s such a different model,” said Kelman. “In the next few months we expect to be live. So many consumers start their search online. Being a technology-first brokerage just helps us meet customers at a lower cost and then I think consumers really want someone who is on their side. That’s having agents who are employees of the company, who can work together as a team, taking technology, which means we can deliver better service.
“It’s an on-demand world,” says Kelman. “People want to touch a button and have their groceries delivered or a taxi pick them up. Now they have the same expectation of Realtors, which means organizing to work as a team and using technology to get people into homes at a moment’s notice, to answer their questions whether it’s a weekend or weekday night.” He says it’s a challenge for the industry, but it’s “what Redfin was organized to do.”
Redfin was launched in the United States in February 2006 and today has a presence in more than 85 markets south of the border.
Redfin’s website and mobile apps will show all homes for sale through the local MLS in Toronto and Vancouver. It will also show sold prices in those markets.
Asked about the company’s bigger plans for the Canadian market, Kelman replied: “We don’t know yet. Our biggest plan is to make our first customer very happy and after that we plan to make our second customer very happy. We can’t get ahead of ourselves here . . . We do hope to be able to offer services in other major Canadian cities. That will take time . . . It took us 10 years to cover most American cities and still we don’t cover them all. We’re going to focus on the major cities just because it helps us to have some density – some density of customers, some density of agents.”
Salespeople working for Redfin will be employees of the company – not independent contractors – and will be paid bonuses based in part on customer satisfaction. The number of agents in individual Canadian offices would depend on how busy those offices become.
“I think one difference between Redfin and other brokerages is that we just don’t measure our success in terms of the number of agents we have. We don’t recruit agents as a way to recruit customers. Our goal is to make the agent as efficient as possible. It’s not a recruiting operation primarily. It’s a customer service operation,” says Kelman.
Redfin says it will charge home sellers a one per cent listing fee. Agents will provide complete home-selling services such as pricing and staging advice, free professional photography, a 3D walkthrough of the home, open houses, yard signs and beautifully designed marketing materials. The company said its listings will receive premier placement on Redfin.ca and will be displayed on Realtor.ca and other Canadian real estate websites via the Multiple Listing Services.
“By working with a local Redfin agent, a seller in Toronto will save $11,250 on a $750,000 home sale when compared to paying a listing commission of 2.5 per cent. The one per cent listing fee does not include a buyer’s agent commission, which is typically paid by the seller,” said Redfin.
Kelman said the company’s technology makes it more efficient, which gives it the ability to implement its cost structure. He says that’s important because there is an affordability crisis in both Canada and the United States.
“It’s harder to get a loan. Foreign investment has driven prices up and now there’s just a bunch of people who need every dollar they can to go to the house,” he says. “So, paying real estate agents a living wage where really we want best-paid professionals to work for us but still investing in efficiency – let’s just have our cake and eat it too, if the consumer can get low fees and the agent can still have a good life.”
Blair Anderson, a Toronto native with more than a decade of experience in real estate, will lead Redfin’s operations in the Greater Toronto Area.
“Canadian consumers are discerning and tech-savvy and I believe they will be blown away by Redfin’s unmatched combination of agent service, technology and value,” says Anderson in a news release. “Not only will we provide full real estate services for a lower fee, the Redfin model rewards customer service, so our agents are accountable to deliver the best outcome for their clients.”
The company said its customers, whether they buy a home or not, are asked to review the service they received from their Redfin agent. The reviews are published on the agent’s online profile and agent bonuses are based in part on these reviews.
© 2017 REM Real Estate Magazine
