Seattle-based real estate company Redfin Corp. (Nasdaq: RDFN) is expanding its instant homebuying service, RedfinNow, to the Minneapolis-St. Paul metro area.
The announcement, which Redfin made Friday, comes less than two weeks after Zillow Group Inc. made the decision to shutter its own iBuying service, Zillow Offers. Redfin CEO Glenn Kelman said the expansion of RedfinNow isn't about trying to make its iBuying more popular, but rather about making sure consumers have options.
"We think there will be markets where most people are going to want a brokered sale and markets where more people will want an instant offer," Kelman said. "We're not pitching iBuying. We're pitching the choice."
Kelman added that certain situations make sense for iBuying, for example a family with multiple kids and a dog, all of which could make the family constantly stressed about getting the house ready to show. For those trying to use every penny of a home to buy a better home, however, he still recommends listing the home on the market.
With the expansion into the Twin Cities, RedfinNow is currently in 30 markets, including 12 added this year alone. After consumers sell their home to Redfin through RedfinNow, the company fixes up the home and sells it on the open market. In addition to RedfinNow and its brokered listings, Redfin offers a service for high-end homes called Redfin Premier.
Zillow's decision to shut down its iBuying service marked a somewhat stark reversal for the company, which had praised the success of Zillow Offers only months earlier on its second quarter 2021 earnings call. Shutting down iBuying will take several quarters, according to Zillow, and result in layoffs to about 25% of the company's roughly 8,000-person full-time workforce. The company will lay off 47 workers in Seattle starting Jan. 3.
“It weighs heavily on me that our strategic decision to wind down the Zillow Offers operation after three and a half years involves having to let about 25% of our great colleagues go over the coming quarters," Zillow co-founder and CEO Rich Barton said during Zillow's third quarter 2021 earnings call. "I am grateful to them. They have worked hard and will be missed. We are committed to providing a smooth transition for those affected.”
