Seattle-based real estate company Redfin Corp. (Nasdaq: RDFN) will continue its measured approach to RedfinNow, the company's direct homebuying service.
On the company's fourth quarter 2021 earnings call Thursday, Redfin CEO Glenn Kelman said gross profits have improved across iBuying. Later on the call, however, he added that growing RedfinNow requires buying homes at the right price, which makes it risky.
"So we're going to run it on our terms, which means that when we have the capacity to renovate those homes and get them back on the market and when we know this is a property that we have the expertise to trade at a good margin, we'll buy it," Kelman said on the call. "But other times, we're going to get demand where someone else could handle that better than we do. And today, we sometimes refer that, but often we turn it away."
Through RedfinNow, Redfin buys the home directly from the consumer, fixes it up and sells it on the open market. In its earnings results, Redfin revealed it sold 600 homes through RedfinNow during the fourth quarter, averaging over $622,000 in revenue per home sold. In the fourth quarter of 2020, the company sold just 83 homes through RedfinNow. Redfin launched its iBuying service in the Minneapolis-St. Paul metro area in November, bumping to 30 the number of markets where RedfinNow is available.
Zillow, meanwhile, announced in November it would shutter its own iBuying service, Zillow Offers, over the next several quarters. The move will result in about 25% of Zillow's roughly 8,000 employees getting laid off. Zillow Offers still represented about 86% of Zillow's $3.88 billion in total revenue during the fourth quarter of 2021.
In addition to RedfinNow, Redfin offers brokered listings and a service for high-end homes called Redfin Premier. The company went public on the Nasdaq in 2017.
Redfin generated $643.1 million in revenue during the fourth quarter, a 163% year-over-year increase. The company's gross profit for the quarter was $108 million, up 35% from the fourth quarter of 2020.
