If you’ve ever spent time looking at houses, you know how wildly a listing can differ from reality. In many cases, the text exaggerates the charm of decaying old homes. Photos make rooms look bigger than they actually are, while deftly avoiding problem areas. And the “great neighborhood” promised by a listing turns out to be anything but.
“About half the time, you know you’re not going to buy a house as soon as you drive up,” says Glenn Kelman, the CEO of online real estate listings and brokerage company Redfin. “And you’ve wasted a trip out there.”
But Kelman hopes his company can help solve this problem after acquiring a startup called Walk Score for an undisclosed amount. Walk Score provides information about how easy it is to walk or bike different neighborhoods through the U.S., Canada and Australia, as well as how well they’re served by public transit.
The deal follows last July’s news that Zillow, the largest real estate listings site, will acquire the second largest site, Trulia. Facing consolidation from its largest competitors, as well as a growing number of new competitors like Househappy.org, has likely put pressure on Redfin, which simply doesn’t have the name recognition that Zillow, to up its ante. Trulia already includes information such as crime rates and nearby amenities on its listings pages.
It’s all part of a slow but widespread effort to move streamline the real estate business via the internet. We’re still a long way from upending the very entrenched ways of old school real estate operations, but gradually, things are indeed changing.
Founded in 2007, Walk Scre rates neighborhoods on a scale of one to 100 based on the proximity of amenities, such as grocery stores and restaurants. Once that data has been added to all of Redfin’s listings, it should help Redfin users tell if a house is really “close to everything,” or if an agent is full of it.
But Redfin won’t be hogging all of Walk Score’s data for itself. The Walk Score website and data service, which developers can use to add Walk Score’s information to their own apps, will continue to operate independently, even as Walk Score’s nine employees make to move to Redfin’s offices. Walk Score CEO Josh Herst will advise the two companies during the transition, and then leave the company.
Kelman says Redfin has actually been courting Walk Score for years. “We’ve talked with Walk Score in the past, but we didn’t have the dough,” he says, It’s only in the past year that Redfin has had the money to make acquisitions, thanks to a $50 million round of funding last November.
Kelman wouldn’t comment on whether we can expect further acquisitions, but he did say that Redfin users can expect more contextual information to be added to the site’s listings in coming months. “We have a discipline of not talking about software before it ships,” he says. “But we are working on a way to help buyers share information privately. That’s about all I can say.”
Including Walk Score data, or other information such as crime rates, on Redfin’s service may make some of its listings look less attractive, and that could be an issue, since Redfin is not just a listing site but a brokerage firm. In other words, it gets paid for sales. But Kelman says that, ultimately, adding the data is for the best, since it will improve the experience of buyers.
“I hope none of our agents would post a bait and switch,” he says. “We have fiduciary responsible to cast a home in the best light, but we have to be honest.”