I have started to have more than a few clients who have worked with or are working with Redfin real estate agents. Redfin is the online real estate company that I think began in the Seattle market whose selling point is the refunding of 50% of a buyer’s agent’s commission back to the individual buyer. I’ve been reading about them in the general business media for some time now but I believe they’ve only been in the Chicago market for some 2ish years so I had not had direct dealings with them until this fall. Here’s what I’ve found both first-hand and sort of a report of what I’ve heard from my clientele:
Read the fine print on Redfin’s Agency Agreement. Although their marketing is that a buyer gets 50% of the agent’s typical 2.5% commission back the Agency Agreement’s that I’ve seen include a $5,500 minimum commission on Redfin’s part. So lets do the math…on a $250,000 purchase (isn’t the median Chicago sales price around $225,000 or so), 2.5% is $6,250. So Buyer’s “refund” on that purchase would be $750 and far from 50% of the buyer’s commission. Better than the $0 you’d get from most agents but just be aware that until you get a little over a $400,000 purchase price you aren’t getting a “50% refund.”
It’s a Team Approach. The feedback I’ve received on this part of the Redfin model has been overwhelmingly positive both for general customer service and by reducing overall sales pressure. On the customer service front simply more than one agent is involved so there are more people to help you look at properties so a buyer isn’t tied to just one persons schedule. Then once you’re ready to put in an offer you’re handed off to an individual who handles things more personally at the offer/negotiation/closing stage. On the lawyer side of things I thought the customer service was good. And the reviews I heard from clients was that with Redfin there was less “sales pressure” on the part of agents. I don’t know how their agents are compensated but since it is more of a team approach I’d guess it’s not purely on the sales commission like most agents.
Finally, I like the Forums feature that they have on their Website specific to the Chicago market. If nothing else, maybe you can use the threat of Redfin to negotiate your non-Redfin agent’s commission downward or get yourself a refund!
I’ll check this one out. Thanks for sharing this real estate firm here. I am looking for one. Good luck and a happy new year to you!
I’m glad to hear you had a good experience working with our team!
To shed a little light on compensation, none of our agents earn a commission. Instead, depending on their position, they earn some combination of base salary with a bonus for every happy buyer or seller. We measure customer satisfaction by surveying everyone who works with Redfin, whether they close or not. And we publish all those surveys, good and bad to our site.
Hopefully we’ll work together again soon,
Matt
You are right.
They don’t get paid on commision. It is salary plus customer reviews of that agent. Ie a bonus if the customer was happy.
And yes, customers frequently ask me for a rebate and use companies like Redfin (yes there are others) to try to get a Match or discount. I applaud them for trying (I say no, and I send them to my blog. If they see value in using me, great, if not then I don’t hear from them again)
Heck, I used to rebate, but then I got good and didn’t need to anymore.
Frank
broker FranklyRealty.com