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it depends on the price range. they also have a minimum. People also need to realize the redfin doesn't exist everywhere.
Before it always stated 1% , never saw anything about different percentages based on price range .
I do know that they don’t deal with certain price ranges though and they aren’t in all markets .
They have expanded to quite a few though .
Before it always stated 1% , never saw anything about different percentages based on price range .
I do know that they don’t deal with certain price ranges though and they aren’t in all markets .
They have expanded to quite a few though .
Higher fees?
Begs the question: After 12 years, are they yet reliably profitable?
to I'll Say's inquiry ... Redfin started with 50% rebates to Buyers who used them as their Buyers Agent. That number has gone down dramatically as Redfin realizes it's really hard to make money that way.
So there's a non-"price fixing" model for you. Buyer gets a chunk of change in some fashion at closing. There are also plenty of agents who will "rebate" a portion of their compensation to Buyers. That's a 2nd model, and the rebate can be anywhere from 10% to 50%.
A buyer can also determine they wish to only find the home on their own, and only go find a FSBO. There's no compensation paid then.
Any Buyer would also be free to find a quality agent and negotiate an hourly fee. There's one business that has tried to run with the "fee for service" model for both buyers and sellers. I would suggest the issue they've run into is not enough people are willing to pay out-of-pocket, rather than just let it get paid at the closing table.
to I'll Say's inquiry ... Redfin started with 50% rebates to Buyers who used them as their Buyers Agent. That number has gone down dramatically as Redfin realizes it's really hard to make money that way.
So there's a non-"price fixing" model for you. Buyer gets a chunk of change in some fashion at closing. There are also plenty of agents who will "rebate" a portion of their compensation to Buyers. That's a 2nd model, and the rebate can be anywhere from 10% to 50%.
A buyer can also determine they wish to only find the home on their own, and only go find a FSBO. There's no compensation paid then.
Any Buyer would also be free to find a quality agent and negotiate an hourly fee. There's one business that has tried to run with the "fee for service" model for both buyers and sellers. I would suggest the issue they've run into is not enough people are willing to pay out-of-pocket, rather than just let it get paid at the closing table.
Thank you for your response. I was referring to the need for SELLERS to pay an almost standardized amount to a buyer's agent. How does the buyer's agent refunding some of their commission to the buyer address that point? sorry if i'm being thick again.
So if I remove your points about buyers agents rebating money to buyers, the SELLER is only left with the option to sell FSBO without offering any buyer's agent commission. As I said in my post, I believe that almost all buyers are or will be working with a buyer's agent so there really is a tiny pool of buyers you woudl be trying for. Anyway, I believe that most FSBOs (except non-open market sales like family, etc) and "discount" brokers/agents still pay full fat buyer's agent fees. They do it because they have to. The house is practically excluded from almost all buyers unless that commission is paid - no negotiation, no competition, no choice.
oh, "fat buyer's agent fees". That's a completely different topic and has nothing to do with selling using Redfin.
perhaps you can search the forums - I find CD has a pretty god search function - for "buyer agent commission" topics, read up, and if you still have ?'s, ask there. Or even start your own topic.
oh, "fat buyer's agent fees". That's a completely different topic and has nothing to do with selling using Redfin.
perhaps you can search the forums - I find CD has a pretty god search function - for "buyer agent commission" topics, read up, and if you still have ?'s, ask there. Or even start your own topic.
I was responding to agent Mike J who was talking about "full commission" and price fixing in the industry. That's why I responded talking about buyer's agent fees which are always "full" (no negotiation) and, in a way, price fixing (almost all buyer's agent fees in a given market are the same - I think someone quoted around 90% being the same in their market). I thought i was following the topics raised on this thread but i'm sorry if i meandered too much. My bad!
Good tip to be vocal about this. LIke i said, i do have a need for an agent in the near future so probably won't impact this but good for the future for myself and others if there is change.
I feel like the seller pays for the buyer's agent because there is no other choice. With buyer's agent, i as the seller have no idea what the buyer needs for help with the purchase, how much what they need should cost (maybe some of it is low skill other of it is higher skill), and if it's good value. I just have to pay like a tax to get access to buyers. Sorry that's what it feels like. I'm a buyer too so it's not like I don't care about buyers but the buyer should pay for what they need help with, negotiate the prices like you can with a seller's agent, and make sure they get what you pay for. I hate having to pay almost 3% for a buyer's agent just to have access to buyers in the market. No negotiation. No choice if you care to have buyers. just pay up or you can't sell your house.
Sorry if I'm thick but i don't really understand the point about 40 years ago. You said it was a seller expense but that's the same as today. The fact that buyers have representation today does not change the fact that the seller pays for it all. You could say that it's rolled up in the price and ultimately the buyer pays but isn't that the same as 40 years ago. Sorry i'm probably just being stupid here.
Thank you for your response. It's nice to see that not all agents like this model and that you see some of the same problems that irk me! Soon I'll be doing it all over again and I'm not looking forward to it.
The Reality is both buyer and seller pay, and yes it has always been that way. Proceeds come from the sale, but the price includes all the costs of selling, including commissions, legal fees, transfer taxes, etc. So if we erase all the real estate agents and the real estate agency machine, sellers wouldn’t see 4-7% of their proceeds “disappear”. But the price on their home would be reduced also, so they would receive less “proceeds” to begin with. But you would still have this semi-adversarial transaction with opposite interests in play. The buyer wants your house, and you want to sell it to him. That much you agree on. But there are opposite interests with regard to price, terms, etc.
The asset is complex and most people do not maintain it properly. Deferred maintenance is rampant in most used homes. So a buyer doesn’t want to assume the responsibility for that. And the seller’s position is it’s fine and they live there without dying and there is no expectation to provide a perfect house to a buyer.
Many times, the defects and deferments aren’t in plain sight. Professionals such as engineers, plumbers, electricians, etc are necessary to assess the defects. Defects that the buyer didn’t know about when they formulated their offer. And often the seller was unaware of also. So again, reverse interests that need to be negotiated.
This means stress and confusion. Add in the fact that human beings anthropomorphize their homes and become emotionally attached to them over time and that adds gasoline to the fire. Egos become invested. Buyers are questioning how well you have cared for the home you have become so attached to. And even questioning your taste in decor, landscaping, functionality, etc.
So who is going to act as a buffer and make sure that the competing and reverse interests do not derail attainment of the goals of both the buyer and the seller? That’s the job, among many others, of a real estate agent. And that is what we are paid for. It’s not necessarily the time spent, it is handling the competing interests.
The market operates smoothly because of the real estate agent machine. Why is it possible to even price your home so easily? Because of the transparency the real estate profession brings to the market by collecting, organizing, and disseminating transaction data. That machine is why buyers don’t generally overpay by too much, and sellers don’t undersell by too much. The commission paid is why there is a convenient and stable mechanism to sell a complex asset in a complex legal environment to a buyer with interests that are both aligned and misaligned to your own.
You want to erase the agent commission? Erase the machine that provides the transparency and the management of competing interests in a complex environment and with a complex asset.
Anyway, don’t fear the process. It can actually be fun if you have a good agent. And the price you pay really is negotiable. I adjust my commission all the time based upon my assessment of how much time and care you will need, as well as the condition and complexity of the home you are selling or buying.
The Reality is both buyer and seller pay, and yes it has always been that way. Proceeds come from the sale, but the price includes all the costs of selling, including commissions, legal fees, transfer taxes, etc. So if we erase all the real estate agents and the real estate agency machine, sellers wouldn’t see 4-7% of their proceeds “disappear”. But the price on their home would be reduced also, so they would receive less “proceeds” to begin with. But you would still have this semi-adversarial transaction with opposite interests in play. The buyer wants your house, and you want to sell it to him. That much you agree on. But there are opposite interests with regard to price, terms, etc.
The asset is complex and most people do not maintain it properly. Deferred maintenance is rampant in most used homes. So a buyer doesn’t want to assume the responsibility for that. And the seller’s position is it’s fine and they live there without dying and there is no expectation to provide a perfect house to a buyer.
Many times, the defects and deferments aren’t in plain sight. Professionals such as engineers, plumbers, electricians, etc are necessary to assess the defects. Defects that the buyer didn’t know about when they formulated their offer. And often the seller was unaware of also. So again, reverse interests that need to be negotiated.
This means stress and confusion. Add in the fact that human beings anthropomorphize their homes and become emotionally attached to them over time and that adds gasoline to the fire. Egos become invested. Buyers are questioning how well you have cared for the home you have become so attached to. And even questioning your taste in decor, landscaping, functionality, etc.
So who is going to act as a buffer and make sure that the competing and reverse interests do not derail attainment of the goals of both the buyer and the seller? That’s the job, among many others, of a real estate agent. And that is what we are paid for. It’s not necessarily the time spent, it is handling the competing interests.
The market operates smoothly because of the real estate agent machine. Why is it possible to even price your home so easily? Because of the transparency the real estate profession brings to the market by collecting, organizing, and disseminating transaction data. That machine is why buyers don’t generally overpay by too much, and sellers don’t undersell by too much. The commission paid is why there is a convenient and stable mechanism to sell a complex asset in a complex legal environment to a buyer with interests that are both aligned and misaligned to your own.
You want to erase the agent commission? Erase the machine that provides the transparency and the management of competing interests in a complex environment and with a complex asset.
Anyway, don’t fear the process. It can actually be fun if you have a good agent. And the price you pay really is negotiable. I adjust my commission all the time based upon my assessment of how much time and care you will need, as well as the condition and complexity of the home you are selling or buying.
Thank you for taking the time to explain your perspective. I did NOT say that agents who work for buyers and sellers should not be compensated. Nor did I say that agents don't provide value and are not needed. I did not say that and I don't believe that.
My point was very simple.
The buyer's agent in its current form adds a lot to the overall transaction cost. It inflates the cost of homes and adds a lot to peoples' mortgages for decades. Or it saps the seller's money depending on how you see it. I understand that there are competing interests and often people need some help with some or all of the transaction. We've seen SELLERS agent fees slowly reducing and different models have emerged to give consumers choice. But the BUYERS agent side has remained unchanged and prices are pretty much the same in any given market. 2.5 - 3.0 percent or more for that side of the transaction is extremely expensive. I experienced this with my last sale when I was looking at different options but none existed on the most expensive side of the transaction - the BUYERS agent side. It's all fixed price no matter if the buyer needs a little help or a lot. Buyers have absolutely no incentive to try to save money on their agent or even care about the cost because they think someone else pays. As long as they get SOME value from it and the agent isn't completely incompetent or dishonest, then they are blissfully happy that they got help that was "free" to them. They don't realize that they will be paying for that service for DECADES and the cost of it might equal a complete bathroom renovation. Even if they did realize it, they can't really do anything about it.
No choice, no negotiation, no real competition to put downward pressure on price and upward pressure on quality of service and innovation. In other words, no incentive to evolve to provide more value in the quality to cost ratio.
a buyer can choose Redfin or numerous less well-known outfits, and get some of the money back. That doesn't change the seller side, no.
You can go FSBO and refuse to pay any Buyer Agents, or provide less than what is the common local compensation to any Buyer agents. Either of these DOES reduce the seller's cost, directly.
Otherwise, the issue you have is with the entire system, known as "cooperating brokerage". Literally, when you list your house for sale, you tell your listing agent - I am paying you X, sell it however you want. The listing agent then says "well, it's likely a competing broker from another company will have the Buyer, and I must upfront disclose to you how I will pay that broker from what you're paying me". The listing agent has to inform all other local agents what the compensation is.
It is a fact that the Seller can say "I want to cut costs, so I will only offer $1,000" It is also a fact that, faced with such a reduced payout, that some agents will not want to have the conversation with their Buyers where they say "OK, this house is one you'll have to come out of pocket for my compensation." and instead just avoid your $1,000 payout. Of course, it's also very true that the Buyers who get that conversation will say "nevermind, let's ignore that house".
It's not always the agent snubbing FSBO's or unexpectedly low-compensation homes. The Buyers do it themselves just as often. Remember, 95% of Buyers look online - they see your house. Agents can't avoid them finding out about it.
a buyer can choose Redfin or numerous less well-known outfits, and get some of the money back. That doesn't change the seller side, no.
You can go FSBO and refuse to pay any Buyer Agents, or provide less than what is the common local compensation to any Buyer agents. Either of these DOES reduce the seller's cost, directly.
Otherwise, the issue you have is with the entire system, known as "cooperating brokerage". Literally, when you list your house for sale, you tell your listing agent - I am paying you X, sell it however you want. The listing agent then says "well, it's likely a competing broker from another company will have the Buyer, and I must upfront disclose to you how I will pay that broker from what you're paying me". The listing agent has to inform all other local agents what the compensation is.
It is a fact that the Seller can say "I want to cut costs, so I will only offer $1,000" It is also a fact that, faced with such a reduced payout, that some agents will not want to have the conversation with their Buyers where they say "OK, this house is one you'll have to come out of pocket for my compensation." and instead just avoid your $1,000 payout. Of course, it's also very true that the Buyers who get that conversation will say "nevermind, let's ignore that house".
It's not always the agent snubbing FSBO's or unexpectedly low-compensation homes. The Buyers do it themselves just as often. Remember, 95% of Buyers look online - they see your house. Agents can't avoid them finding out about it.
You're right that agents can't avoid clients wanting to see or even buy a home with no offered buyer's agent commission or commission lower than the cough-cough "going rate". However, we all know:
1. very few sellers selling on the open market are bold (or stupid) enough to not offer the "going rate" for buyer's agents. If you don't, your home won't sell. As I said before, you do have a choice but unfortunately that choice is whether you want to sell your house or not. To many consumers, it feels too much like monopoly or mob where you do also have a choice. Pay protection money or get your knees broken. I believe this is part of the reason why agents have a bad reputation.
2. agents have a lot of influence on buyers. And buyers don't have $thousands extra cash to pay for buyer's agent fees when other houses will "pay for" your buyer's agent. That's just how it works. Sellers have to pay the "going rate" or agents will steer clients elsewhere and clients will not be interested in coughing up thousands for their agent. Bad combination if you're trying to sell a house.
The proof is in the outcomes, not in the theory of what people might be able to do. How often do sellers pay for part or all of their buyer's agent? If this is a viable choice between buyer and seller, we'd see it at least with some significance. how often do you see of agents working with clients on homes where no buyer's agent commission is offered?
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Soon I'll be doing it all over again and I'm not looking forward to it.
