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How Are Redfin Agents Paid – Redfin vs. Realtors: The Difference | Sell with Redfin | Redfin fees | Buy with Redfin | Alternatively | FAQs
Redfin is a great alternative to traditional brokers if you’re looking to save money. It offers affordable prices and the same level of service you would expect from a regular agent. But Redfin isn’t the best choice for most people. Other discount brands, like Clever Real Estate, offer bigger savings — and better hands-on service.
How Are Redfin Agents Paid
For many home sellers, Redfin is a great alternative to traditional realtors and offers legitimate savings. But you probably have other local options that offer better overall value than Redfin. Most sellers can find other low commission real estate brokers who charge lower rates while maintaining similar (or higher) service standards.
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If you’re selling a home that’s priced lower than most other local homes, Redfin won’t be able to save you any money. The minimum costs tend to reduce and even eliminate the savings it is said to offer. You might be better off getting a traditional realtor – you’ll pay roughly the same (or possibly less), and you’ll likely get more personalized service.
If you’re primarily considering Redfin to save money, other real estate companies offer better service for the same or better price.
Clever Real Estate, for example, negotiates 1.5% listing fees with top local agents from major brokerages like Keller Williams and Century 21. In other words, you get the best of both worlds: the savings of a discount broker like Redfin and the direct service and support of a realtor high rated conventional.
Redfin only has a handful of agents in most markets, so it’s hard to compare agents to get the best one.
Redfin Design Language — Carey Spies ⨳
Win The quality of agents always varies, but with a traditional agent you will have many options to compare so you can choose the best agent for you.
Fees: If you’re selling, Redfin is cheaper than traditional brokers – charging 1.5% compared to the standard 2.5-3% charged by traditional agents. And if you sell it wrong
Redfin buyers can also earn homebuyer rebates on qualifying purchases. But the size of the average discount is usually only about 0.2%, which does not save much on your savings.
Quality of service: Redfin’s service is also different from traditional agents. While Redfin offers the same number of services that traditional agents offer, it uses a team-based approach. It may cause you less immediate attention from your assigned agent.
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Your assigned agent will not necessarily handle most or all aspects of your transaction – like a traditional agent. Instead, different people at Redfin will handle different stages of your home buying or selling journey.
Redfin agents provide several legitimate advantages to sellers over traditional agents. It’s cheaper – and while you have to make some sacrifices in terms of service, those sacrifices are usually small. The quality of the agents is actually neither better nor worse – although finding local Redfin agents in rural areas can be difficult.
But while Redfin has advantages for sellers, it’s also not special compared to the competition. Many other discount brokers offer better savings to sellers, often without sacrificing service. We recommend shopping around to get the best deal possible without compromising service.
Redfin’s standard listing fee is 1.5% – compared to the 2.5-3% charged by traditional agents. If you buy
How To Use Redfin To Buy A Home
Sell with Redfin within 365 days of each other, then you will get a check after closing worth up to 0.5% of the sale price, which effectively lowers your listing fee to 1%.
Remember that the listing fee is not the only realtor commission you have to pay when you sell. You should also offer the buyer’s agent a commission, usually 2.5-3%. So, your total commission with Redfin will be 4-4.5%. Use the calculator below to see how much you could save with Redfin vs. Traditional realtors:
Redfin’s low commission rate is subject to a minimum listing fee, so some sellers may pay more than the advertised 1.5%. Minimum fees vary by location and they are higher in hotter housing markets, such as San Francisco and Los Angeles. Check out Redfin’s minimum fees below. For metro areas or states not on the list, the minimum fee is $2,000.
If you’re selling a home that’s below the median value in your area, you should watch out for Redfin’s minimum fees. It can be quite high in some cities and states, where they can negate the savings you get from Redfin.
How Do Real Estate Agents Get Paid?
For example, if you live in an area where the minimum listing fee is $6,000, your home must sell for at least $400,000 in order to receive Redfin’s 1.5% listing fee. Otherwise, you must pay a minimum listing fee of $6,000. In effect, that means you pay more than 1.5% – and potentially higher than the 2.5-3% commission you get from traditional brokers. .
Bottom line, don’t assume that Redfin will save you money. Do your research to see what other companies may offer better savings.
Redfin also offers a premium service to sellers called Redfin Concierge, where they will help with renovations and staging. But not worthwhile for most sellers. The listing fee is higher, at 2.5%, and it’s only available in some markets.
If your home only needs a little sprucing up, paying an extra 1% on your listing fee — which can add up to thousands of dollars — might not make much financial sense. Instead, we recommend using those savings to pay for your renovations yourself and then use Redfin’s standard service or another low-commission broker.
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Traditional Realtors tend to offer a lot more personal customer service than Redfin – and they’re definitely a better fit if you’re selling your first home. But if you are not comfortable with a little less hand-holding the sale of your home, the small trade-offs in customer service – especially combined with savings – are pretty negligible.
One of the main differences with Redfin agents vs. Realtors is that Redfin agents handle more transactions than traditional agents do. It requires them to work as part of a team, with different members handling different aspects of your transaction. So, instead of just dealing with your agent, you can have different people show your home, help you close, or manage your listing.
A team-based approach is not inherently bad, but it does create opportunities for miscommunication if you have a complex situation. When you work with a traditional realtor, you have a single point of contact who can take care of any issues you may have. But with Redfin, you may find yourself talking to different people — or relying on different people to send your concerns to the right people.
Redfin also relies heavily on apps and online dashboards throughout the sales process. If you are comfortable using technology, this technology-driven approach may suit you. But if you are less comfortable with it – or you just like to have a human handle most of the transaction – then Redfin can feel a bit less personal than working with a conventional realtor.
Real Estate Agent Commissions: How Much Are They?
Redfin agents are licensed realtors and they are no better or worse than traditional agents. Whether you work with a Redfin agent or a traditional agent, the quality varies from one agent to another.
One problem with Redfin agents vs traditional realtors is that Redfin is not available everywhere, especially not outside of major cities. You may have a harder time comparing Redfin agents where you live because there aren’t many — or any — available. So you may be more likely to end up with an agent that is not a perfect fit if you go with Redfin than if you compare Redfin’s agent to other local realtors who offer savings in your area.
We always recommend comparing agents before choosing one, regardless of whether you use Redfin or a traditional realtor. Interview at least two to three agents to make sure you find the best one. You are never under any obligation to sign up with an agent just to talk to them.
Also, while there is nothing wrong with Redfin agents, since they handle many transactions, you may find that you receive less individualized service. If this is your first time selling a home – or you just appreciate having more dedicated service – then that fact can be a major downside.
The Redfin Business Model
But if you don’t like working with different agents or you feel you can navigate the selling process without the direct service of a traditional agent, then Redfin may work for you.
In markets where Redfin doesn’t have many agents available, they can pair you up with someone called a Redfin Partner Agent. Despite the Redfin name, this is a traditional agent that has agreed to take on some Redfin clients. There are no benefits to working with Redfin Partner Agents vs. Traditional realtor.
The main problem with Redfin Partner Agents is that they are not bound by Redfin’s
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