RedfinNow was an iBuying division of discount real estate brokerage Redfin that purchased properties for cash and resold them at a profit. The service shut down in 2022 after reporting significant losses.
During its operation, RedfinNow received mixed customer reviews. Some praised the ease of selling a home to the company, while others were disappointed by the offer prices and service fees.
Why did RedfinNow shutter while other iBuyers continue to operate? Analyzing RedfinNow’s offering against its main competitors can help answer that question.
What was RedfinNow?
RedfinNow was an iBuyer, a company that buys homes directly from sellers for cash, offering a convenient alternative to the traditional selling process. When selling to an iBuyer, a homeowner typically receives a quick cash offer and can avoid repairs, showings, and negotiations with multiple prospective buyers.
Instead of realtor fees, an iBuyer usually charges a service fee. This was also the case with RedfinNow; however, the company charged 5-13% in service fees, which was above the market average of 5%.
RedfinNow was created as a division of Redfin, which mainly operates as a low-commission brokerage. With RedfinNow, sellers could choose their closing date and even rent the property back until they were ready to move. In return, RedfinNow would buy the home for a lower-than-average market price, renovate it, and sell the property at a profit.
RedfinNow alternatives
RedfinNow ceased operations in 2022, reporting low profitability. However, there are multiple iBuyers that you can consider if you want to sell your home quickly for cash.
Two of the largest iBuyers are Opendoor and Offerpad. Both charge 5% service fees and have similar requirements for qualifying properties. While Opendoor is more widely available (26 vs. 14 states), Offerpad provides more perks for sellers, such as a free local move.
Another option would be to work with a cash offer network, such as Clever Offers. These services help buyers find and compare multiple cash offers, and they typically charge no service fees to sellers.
RedfinNow reviews: A mixed bag
Because the service was shut down more than two years ago, only singular comments about RedfinNow are still available on websites like Reddit.
Positive reviews
Some customers who used RedfinNow appreciated its streamlined approach to home selling. Homeowners mentioned the quick process and the ability to choose a closing date as the service's main benefits.
Additionally, users praised the convenience they enjoyed selling to RedfinNow — they were able to avoid the hassle of open markets and repairs. The certainty of a cash offer was another reason the defunct division and its offering appealed to sellers.
Negative reviews
Despite these advantages, some users pointed toward several consistent issues. The core issue seemed to be that RedfinNow struggled to meet customer expectations while maintaining profitability.
Sellers regularly mentioned high fees, offers significantly below market average (even before the fees), and significant decreases in initial offers after RedfinNow factored in repairs and other costs.
Some prospective buyers who used the service were also dissatisfied with homes that RedfinNow would resell after conducting the needed repairs. They mentioned undisclosed problems with the properties and cheap renovations as issues that steered them away from purchasing.
Why did RedfinNow shut down?
Market tailwinds
Following the cooling of the pandemic boom in the housing market, 2022 brought issues that created significant challenges for some real estate companies. Rising interest rates made housing less affordable, and demand slowed significantly.
In 2022, Redin experienced two rounds of layoffs, first cutting its workforce by 8% in June[1] and then by 13% in November.[2] Closing RedfinNow was part of the strategic decision, trying to eliminate the riskier business model that was expected to lose $22 million to $26 million that year alone.[3]
Discussing a RedfinNow shutdown, a company spokesperson said that “maintaining a profit with rising interest rates would make our offers on homes insultingly low.”[4] As the company was preparing for a declining housing market, RedfinNow was deemed nonviable ahead of rising challenges.
Unique operational challenges
So why did RedfinNow shut down while other iBuyers managed to survive, even thrive, despite the tougher market conditions? While there’s no single specific answer, RedfinNow essentially folded under a combination of challenges that iBuyers such as Opendoor and Offerpad managed more effectively.
The company’s operating fees were generally higher than competitors (variable 5-13% vs. set 5%), which probably made the platform less attractive to potential sellers. Also, while some iBuyers sweeten the deal with perks (such as moving and relocation assistance), RedfinNow did not offer any additional built-in services or benefits.
Finally, customer satisfaction with the company’s services appeared lower than that of some competitors. Many potential customers mentioned unexpected fees, poor communication, and surprisingly low initial offers as reasons why they decided to pursue other selling methods.
Broader challenges for iBuyers
RedfinNow’s decline reflected broader issues with the iBuying business model. Experts who analyzed the situation saw a few major problems that had to be addressed for an iBuyer to stay afloat.
First, when the market slowed down after the pandemic surge, iBuyers were left with an inventory of properties they couldn’t sell quickly. Also, some pricing algorithms turned out to be faulty, resulting in overpaying for properties. Finally, some say that the near absence of the human element in the process could also potentially undermine the model’s success.
Many iBuyers have experienced struggles in recent years. Opendoor has had three rounds of layoffs since 2022 and reported significant financial losses in November 2024.[5] Similarly, Zillow's own iBuyer division, Zillow Offers, shut down in November 2021 after becoming highly unprofitable.[6]
How RedfinNow compared to competitors
Here’s a short review of RedfinNow’s services (while it was still operating) in comparison to its main competitors, Opendoor and Offerpad.
RedfinNow vs. Opendoor
Opendoor is the largest iBuyer in the U.S., operating in more than 50 major markets in the country. RedfinNow had less extensive coverage, with availability in 31 markets at its peak.
Opendoor charges a set 5% fee, 1-3% in closing costs, and additional repair costs. Total fees could amount to 7-10% of the home price. While RedfinNow would not openly disclose a detailed list of costs, it would typically charge sellers 5-13% in fees.
Another advantage that iBuyers offer vs. the traditional sales method is a quick closing timeframe. RedfinNow may have had a more appealing closing window of 10-90 days compared to Opendoor’s 14-60 days.
RedfinNow vs. Offerpad
Offerpad is another big player among the U.S. iBuyers, which also seems to outperform RedfinNow in several areas.
First, Offerpad has the fastest closing — as fast as 8 days — compared to RedfinNow’s 10-day minimum. On top of that, Offerpad has a clearer fee structure, charging a 5% service fee, 1-3% in closing costs, and around 2% in repairs (depending on the property).
However, there are a few areas in which RedfinNow had a stronger product. Offerpad is only available in 14 states, while RedfinNow served 31 at its peak. Also, RedfinNow had a more flexible closing window and a rent-back option, which could appeal to some sellers.
Lessons from RedfinNow’s reviews and closure
RedfinNow’s shutdown demonstrates both company-specific issues and common challenges with the entire iBuying business model. While many of its competitors continue to operate, they face difficulties balancing customer satisfaction (and satisfactory prices) and profitability.
While customers value the speed and convenience that iBuyers may provide, high service fees and low offers make it harder to compete with alternative ways of selling. Only time will tell whether the better customer experience and slightly lower service fees that RedfinNow’s competitors offer will be enough for them to stay afloat in the ever-changing housing market.
Selling your house for cash can be quick and convenient, but many sellers are surprised by how much money they could end up leaving on the table. Comparing multiple cash offers can ensure you get the best possible price for your house without sacrificing speed or certainty. With Clever Offers, sellers get the best of all worlds: The company’s 7-Day Sold program lets you find and compare offers from vetted investors in your area. Get started now by answering a few simple questions!