Will New Yorkers buy and sell real estate via the Internet? Online real estate brokerage Redfin says yes.
The Seattle-based tech company, which has raised nearly $170 million from investors to date, announced Friday that it will launch in Brooklyn. Jonathan Makolondra, a former agent with Rutenberg Realty, will lead its expansion. “We’re very excited about a lot of the new developments coming to Brooklyn,” Makolondra said. “We think that’s going to help us grow.”
Founded in 2004, Redfin allows users to list homes, find agents, take virtual tours and sign documents online. It hires salaried brokers, and the company makes money by keeping a portion of the seller’s commission fee, part of which is also refunded to the buyer.
To date, Redfin says it has brokered $20 billion worth of homes sales in 75 cities around the country.
But in New York, a city where agents can earn six and seven figures – or more – it’s unclear whether Redfin’s model will win over the brokerage community. The company declined to disclose how much it pays agents, but the online marketplace Glassdoor reported annual salaries ranging from $28,000 to roughly $43,500 for brokers in other markets.
So far, Redfin has three agents working in Brooklyn, including Makolondra.
Despite its slow start, Redfin’s foray into the New York market comes as a growing number of real estate tech companies are trying to disrupt the way people buy and sell real estate.
On the brokerage front, the frontrunner in New York City is tech-based brokerage Compass, which has raised $73 million from investors to date and is valued at $360 million. The two-year-old firm initially rolled out a model that combined StreetEasy-style listings with salaried “neighborhood specialists,” but subsequently adopted a more conventional approach.
Compass, too, intends to grow in Brooklyn. In July, the firm opened its first Brooklyn office in Park Slope, and last month it inked a deal for an outpost in Williamsburg.