Title: Redfin CEO Optimistic About Future After $418 Million Settlement, Aims to Disrupt Traditional Real Estate Model

Redfin, a discounted residential real estate brokerage, has seen its stock prices plummet following the news of the $418 million settlement reached by the National Association of Realtors (NAR) over commission bundling and inflating. However, CEO Glenn Kelman remains newly optimistic about Redfin's future, stating that the settlement has made it easier for them to change the real estate game and offer consumers a better deal.

Kelman, who has been at the helm of Redfin for almost two decades, expressed his confidence in an interview with CNBC. He revealed that Redfin charges between 1% to 1.5% fee for selling and buying on its platform, significantly lower than the 2.5% to 3% charged by traditional brokerages. The company's business model aims to ensure commissions are not baked into listings, providing cost savings to consumers.

Despite facing challenges such as rising mortgage interest rates and higher inflation, Redfin witnessed a surge in demand immediately after news of the settlement broke. Listing demand jumped by 14%, and homebuyer demand rose by 5% on a weekly basis. Kelman emphasized that this surge was not solely due to seasonality, indicating a potential shift in consumer sentiment towards Redfin's business model.

The settlement reached by NAR, which denies any wrongdoing, is still pending court approval and is expected to take effect in the summer. Nevertheless, Kelman believes that consumers now have a better understanding of the real estate industry and will be reluctant to return to the old commission structure. He highlighted that Redfin has already saved consumers over a billion dollars in fees, and customers have inquired about lowering or eliminating commissions on existing listings.

Redfin's bold approach has not been without its challenges. The company recently cut ties with NAR due to their policies that restrict sellers from listing homes without paying a commission to the buyer's agent. Kelman and the Redfin leadership team have been vocal about the need for industry reform to make it more consumer-friendly and competitive.

While the settlement addresses the alleged conspiracy to conflate commissions, Redfin itself is facing lawsuits, including a recent one filed in California that accuses NAR, the California Association of Realtors, and Redfin of conspiring to inflate commissions. Kelman acknowledged this in his reaction to the settlement, noting that it doesn't address the lawsuits against Redfin without providing further details.

Redfin's CEO remains determined to disrupt the traditional real estate model and give consumers more choice. As the settlement awaits final approval, Kelman believes that the industry is on the brink of real change, and consumers deserve a voice in how much an agent gets paid. With Redfin's low fees and growing consumer affinity, the company is poised to continue reshaping the real estate landscape.

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