SEATTLE—Online real estate brokerage firm Redfin is facing a lawsuit from several fair housing organizations alleging systemic racial discrimination based on findings from a two-year investigation.
The complaint, filed United States District Court for the Western District of Washington, alleges Redfin engages in “digital redlining” as it requires homes to be listed above a certain minimum price to receive benefits of Redfin's services. The investigation allegedly found the policy means Redfin is less likely to offer realtor services, professional photos, virtual tours, online promotions, or commission rebates for homes listed in minority neighborhoods compared to majority white neighborhoods.
As a result, homes in minority communities took longer to sell and sold for lower prices, according to the lawsuit.
Sellers pay Redfin a small fee to list their home on the broker's website, as well as a fee paid to the buyer's broker. Buyers on Redfin are charged a lower fee to list their home, and get a portion of the broker's commission refunded that they can choose to apply to closing costs.
Depending on the outcome, the lawsuit could impact realtors and companies that offer services similar to Redfin.