What is Redfin up to in Washington, D.C.?

Almost a year ago, Redfin launched Redfin Concierge, an ambitious new service designed to make homesellers’ lives easier and their list prices higher by taking the lead on making repairs and renovations to their properties.

On listings worth $ 500,000 or more, Redfin can coordinate, supervise and pay for services such as deep cleaning, painting, staging and landscaping, in exchange for an extra percentage fee on the listing sale price (2 percent instead of Redfin’s signature 1 percent). The service launched first in Los Angeles and Washington, D.C.

Redfin also has a sizeable office in D.C. The area tends to serve as a laboratory for the Seattle-based brokerage because the market falls into Redfin’s customer “sweet spot,” said Redfin spokeswoman Alina Ptaszynski: “tech-savvy price-value conscious [buyers and sellers] with good price points of homes.”

In addition to testing its 1 percent fee here, the brokerage also picked D.C. as one of the markets where it first began experimenting with Fast Offers, proprietary software that Redfin agents can use to quickly draft and submit offers.

Inman visited Redfin’s Washington, D.C. office recently to take a closer look at how Redfin is changing the local market, and to analyze the brokerage’s overall footprint in the capital city.

Disrupting the District?

Redfin’s Washington, D.C. office does not flaunt the amenities of a techie darling. There are no ping-pong tables or video game rooms, as is the case with other real estate and lending brands looking to cater to a younger, more modern workforce. But some of the other affectations seen in the offices of powerful Silicon Valley brands are still evident, such as on the internal decor and artwork.

“The modern way to buy or sell a home” appears in giant cursive on the wall of a room packed with standing desks. Nearby is a portrait of a rabid squirrel, Redfin’s adopted mascot. And next to that, a placard reminds employees that a good Redfin agent “never says I,” “tinkers constantly,” and works “for more than a pay check” — among many other virtues.

Team members said Redfin has wielded a mostly positive influence on the local market and nationally, including by putting downward pressure on commission rates and popularizing new marketing techniques, though others in the industry may dispute this.

Visitors to Redfin’s D.C. office quickly learn that the brokerage purportedly offers ‘The modern way to buy or sell a home’Nine salaried real estate agents across three teams work out of the D.C. office. On a Wednesday in mid-September, when Inman visited, those agents were handling 42 local listings.

While that’s only a tiny fraction of the market, Dan Galloway, Redfin’s D.C. branch manager, says Redfin has grown significantly and made waves in the nation’s capital since he joined the brokerage four years ago.

A placard ticking off Redfin’s many values and a portrait of Redfin’s mascot, a rabid squirrel, adorn a wall in Redfin’s D.C. office.

He said he came on board the same month Redfin introduced a 1 percent listing fee here, one of the first markets where the brokerage tested the cut-rate pricing before rolling it across the country.

“When I started, there were far more listings that were offering 3 percent to the buyer’s agent,” he said, seated at a conference room in an office located in Dupont Circle. Now 2.5 percent is much more common, he added, and “we have seen some agents being willing to match our 1 percent.”

Alina Ptaszynski and Dan Halloway sit in a classroom in Redfin’s D.C. office where the brokerage hosts homebuyer classes.

Steven Wynands, a Realtor at D.C.-area brokerage Samson Properties, validated Galloway’s claim to some extent. “I have definitely lost a client due to the allure of the 1 percent listing fee, 3-D technology, and suggestion that listing with [Redfin] gives them a market advantage,” he said on Inman’s Facebook discussion group.

Galloway likes to think Redfin has also inspired other competitors to expand their services. The brokerage has made 3-D home tours, online and offline “coming soon” marketing, and “last call” emails, among other techniques, part of its listing package, he noted.

Steven Wylands of Samson Properties

Realtor Steven Wylands | Credit: Samson Properties

But Andrea Roberts, director of operations at Wydler Brothers Real Estate, is skeptical on this point. Customers often ask for discounts in listing appointments these days, perhaps in part due to Redfin’s marketing of a 1 percent fee, she conceded.

But some of Redfin’s purportedly innovative services aren’t all that innovative, such as its “coming soon” marketing, she said. Indeed, many other brokerage brands are now offering similar pre-market listings services.

While the brokerage has some great technology, Redfin still doesn’t pose much competition, she added, because its agents don’t establish the same level of trust with their clients as agents like herself. It’s hard for buyers and sellers to form a close connection with an agent they’ve hired largely on the basis of price, she maintains.

Contractors love Redfin Concierge

Redfin D.C. branch manager Dan Galloway is most excited about Redfin Concierge, and Redfin’s contractor partners couldn’t agree more.

Under the concierge service, Redfin will recommend a series of updates and pay for at least some of them, such as deep cleaning, staging, painting and landscaping. Sellers may have to cover other updates or repairs if they choose to follow Redfin’s full list of recommendations, but the brokerage will still coordinate and oversee the project.

Imar Granados took a quick break from his work on a Redfin listing to speak to Inman.

“They keep me busy, buddy,” said contractor Imar Granados, kneeling next to a bucket of cement in the basement of a home whose owners are using Redfin Concierge. “Busy, the whole year.”

He was hard at work installing new floorboards in a home that Redfin plans to list for $ 1.175 million. He’s fixed up at least 10 houses for the brokerage this year, he said.

Inman visited a home whose owners have opted for Redfin’s Concierge Service.

With a Redfin “coming soon” for-sale sign planted in the front yard, the brick home peaks out from behind a tree in the cozy, affluent neighborhood of Tenleytown.

Petro Marynych, a Redfin “associate agent,” showed a coming soon Redfin listing to Inman.

Petro Marynych, one of Redfin’s “associate agents,” showed the home to Inman. While Redfin touts salaried “lead agents” who earn bonuses based partly on customer satisfaction, the brokerage also uses an army of less-celebrated “associate agents” like Marynych. They work as independent contractors and perform one-off services such as showing, inspecting and doing 3-D scans of homes.

Marynych enjoys the flexibility of being an associate agent, though he plans to become a lead agent in the future.

The home he showed was undergoing more extensive renovations than Redfin Concierge typically prescribes. Concierge usually recommends projects that are like “icing a cake,” not baking one from scratch, Galloway, the Redfin D.C. branch manager, said.

But this property’s owners had a unique situation. A Brazilian couple living abroad, they had originally tried to find contractors to redo the home independently. It was only after they learned about Concierge that they decided to put the work in Redfin’s hands.

Redfin will cover the cost of cleaning, staging and some painting, while the owners will pay for renovations. Ptaszynski said the couple was “able to get much better pricing for the work from our partners than what the homeowners were quoted” because contractors are willing to charge lower rates on Redfin-brokered jobs in exchange for repeat business from the firm.

Rival techie real estate brand Opendoor also bargains down rates with contractors — which the startup believes will enable it to offer on-demand home redesigns at discount rates for buyers that purchase its listings.

Redfin recently expanded Concierge from D.C. and Los Angeles to San Francisco, and is considering offering financing that sellers could use to cover updates that aren’t included in the service’s 2 percent fee, Galloway said.

andrea-roberts-wydler-brothers-inman

Andrea Roberts of Wydler Brothers | Credit: Wydler Brothers

Roberts, the agent with Wydler Brothers Real Estate, argues that Redfin Concierge is not original. Agents often help sellers whip their homes into shape, and her brokerage often suggests and oversees makeovers. (Unlike Redfin, her team generally typically doesn’t pay for any of property touch-ups, though.)

While agents like Roberts may continue to view Redfin as a light-touch discounter, Galloway says outright trash-talking has largely dissipated since Redfin has shown it has a lot to offer customers.

Riding in a Lyft away from the Redfin listing, this reporter quickly learned the driver was seeking a real estate license.

So what had he heard about Redfin?

Bad things, he said. For example, the instructor of his real estate class had warned aspiring agents that Redfin’s tries to cut buyer’s agents out of deals, he said.

“Whether that’s true or not, I have no idea,” the driver said.

Redfin’s Ptaszynski says it most definitely is not.

“That is against what we stand for,” she said. “We’re interested in getting the highest price, best terms for our sellers.

Email Teke Wiggin.

Inman