Redfin (RDFN), an online real estate brokerage, shows new real estate listings before its competition, explains Ian Wyatt, growth and income expert and editor of Million Dollar Portfolio.
The company updates listings every five minutes, gives prospective buyers estimates of what properties are worth and tax assessments, you name it. If you’ve ever been in the market for a new home, much less in a bidding war over a property, knowledge is power.
Given the plethora of data Redfin has available, is it any surprise that it would get more directly involved in the real estate business? In January 2017, Redfin launched its RedfinNow business and began buying houses directly from sellers, refurbishing them as necessary, then selling them on.
When the company reported earnings last month, it showed that RedfinNow’s revenue beat all expectations and grew revenue more than seven times year-over-year, hitting $80 million. Total revenue for the company grew more than 70%, hitting $239 million.
It did that by harnessing all of its available data to use machine learning to identify properties with the most profit potential, then doing a direct buy from the seller and fixing the property up.
It then used augmented reality to build virtual tours of the properties that prospective buyers can take through their laptops or smartphones. After the virtual tours, buyers were offered Direct Access, allowing them to buy the properties without any real estate agents being involved.
That’s taking “For Sale by Owner” to new heights and it’s already gotten a name — iBuying. This is a terrific example of a disruptive business. Redfin got its start by offering folks in the real estate market an informational edge, then realized it could use its own information to its advantage.
