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The Science of Real Estate

The Science of Real Estate

At Redfin, we're computer scientists, not sales people. We have access to listing databases and website logs.

And we want to provide practical answers to practical questions. Already we've published data-driven research designed to give you an advantage.

  • Negotiating: when is a seller ready to accept an offer 10% below asking price? We identified 7 characteristics of highly discounted homes.
  • Hot Properties: what kind of properties sell in seven days? We studied the types of neighborhoods and homes that are virtually slump-immune.
  • Commissions: does offering a higher commission really pay? We found out whether higher Realtor commissions lead to faster sales or better prices.
  • Marketing: What's the best day to debut a listing? We identified 7 tactics for maximizing exposure to a listing.

There's more in our blog and you can discuss the findings in our forums.

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Negotiating

Even in a buyer's market, the typical seller will discount less than 2% off his asking price. But ten percent of sellers will discount more than 10%, a difference of $50,000 or more. How can you tell when a seller will stand firm or give ground?

In June 2008, Redfin analyzed more than 9,000 home sales in California, Virginia and Washington states to identify the common characteristics of homes offering the largest discount, so you know when to move in for the kill.

  1. Focus on Listings Unsold After 90+ Days: You're 83% more likely to get a deal.
  2. Focus on Fixer-Uppers: You're 73% more likely to get a deal.
  3. Back Off on Remodels: You're 20% less likely to get a deal.
  4. Don't Be Put Off by a Price Reduction: You're 28% more likely to negotiate a deal.
  5. Look for Homes Owned a Long Time : You're 52% more likely get a deal when the home has been seller-owned for 20 years or more.
  6. But Don't be Put off by Flips Either: Homes seller-owned for less than 5 years were 9% more likely to offer a deal.
  7. Don't Expect Banks to Negotiate Much: You're 9% more likely to get a deal.

Read the full paper .

Seven Tactics for Selling Your Home

As a seller, what can you do to make your listing more successful? Our seven recommendations:

  1. Don't Overprice It: You could lose more in price reductions & negotiations later.
  2. Set Your Price to Show Up in Web Searches: Online activity can increase up to 7.1%.
  3. Debut on Friday: You'll get up to 7.7% more visitors.

To see all seven tips, read the full report.

Setting the Most Effective Commission

Does a higher commission get a seller a faster sale, or a better price?

Our results show that it does not.

  • Homes that set a typical commission took 68 days to sell, on average.
  • Setting a lower commission increased days on market to 89 days.
  • Setting a higher commission increased days on market to 129 days.

Sale-to-list price for among the three groups varied little. Read the full report.

Hot Properties

We noticed that even in a slow market, some homes were selling in less than a week. We studied the Boston and Los Angeles listing databases to find out why. The bottom line is that hot properties are slightly bigger, newer and more expensive, and usually are in desirable neighborhoods.

There are distinct areas and house types where properties still sell fast, which continues to support our reason for doing this study in the first place-- the real estate market isn't really clinically depressed; it's more of a split personality, with the good stuff selling fast, and the rest languishing.

Read the results for Boston and Los Angeles.

Redfin The Science of Real Estate Blog Posts

The Redfin blog also discusses results of our data-driven research.



The Science of Real Estate Press Coverage

The Redfin Advantage

The Redfin Advantage Graph

We negotiate better together.

Broker records show that Redfin agents and their customers negotiate a better price when buying a home.