Seattle-based Redfin, a real estate website that allows users to bypass most of the fees associated with using real estate brokers, has closed a $12 million Series C round of financing. This is on top of the approximately $8 million they raised in their previous two rounds. The round was led by Draper Fisher Jurvetson. Previous investors Madrona Venture Group, Vulcan Capital, BEV Capital and The Hillman Company also participated (see all funding history here).
Redfin is doing their best to completely remove real estate agents and brokers from at least half of a home sale. The company combines MLS listing information (homes for sale) with historical sales data (homes already sold) into a single map. If you find a home you like and want to place an offer, Redfin will represent you in the buying process (they have a call center with licensed real estate professionals to guide you). They then reimburse 2/3 of the buy-side real estate fees to you on closing. The average home buyer saves around $10,000 on a transaction. The company will also represent sellers in home sale transactions.
The company has irked the real estate industry enough to get maintream attention. In May they were featured on 60 Minutes. Since then, the company has completed more than $350 million in real estate transactions and has saved customers around $6 million in commissions.
Realtors are fighting back mainly by trying to limit the MLS data that the company can show on its site, and trying to stop the company from showing customer reviews alongside that data. They’ve also seen an increasing number of realtors refuse to accept offers from Redfin customers, and a few “for sale” signs have been chopped down from yards.
I’m not surprised by any of this, given the disruptive nature of their business. Some of the comments left by realtors in our previous posts on the company have been venomous. Still, I have the feeling that the really big fight between realtors and Redfin is still to come.