Have you used RedFin?

[mrhineh]

Curious what the Redfin experiences have been? We have done the research, know what we want, don’t need our hands held to find the home we want to bid on. Most buy side realtors won’t work for less than the 3%, so their 1.5% is attractive. Thoughts?

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[JanelleSaylor]

Hello mrhineh,

I hope home buyers and sellers who have worked with Redfin respond to your post. If you are interested in reading reviews for Redfin agents, we post every single one whether they are good, bad or ugly. Seriously.

Here’s link to our West Seattle agents Kevin and Klaus’s page: http://www.redfin.com/real-estate-agents/washington-seattle/west-seattle

Good luck. If you’re ever interested in posting in the Redfin Forums, that link is here. We’d love your input! http://forums.redfin.com/t5/Seattle/bd-p/Seattle

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[ALS]

We haven’t bought a house via Redfin yet, so I can’t say anything about the negotiating/closing experience with them, but have done some house hunting and have been impressed with their quick response and how easy it was to set up a showing. Like you, we didn’t feel like we needed a lot of hand holding to find our house since we know what we’re looking for and nearly everything is online these days.

Hopefully some more people will chime in with more robust experiences than my own!

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[MrJT]

We tried to by a house that was listed with Redfin using our (Prudential) realtor. We made an offer, it was countered by the buyer, we countered the offer, and they accepted. Then the Redfin agent disappeared. A day or so later another Redfin agent contacted our agent and informed us that he seller had sold the house to someone else. Complete lack of ethics on the part of both Redfin and the buyer. Pretty much the Wall Mart of realtors.

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[Mater]

We used Redfin 2 years ago and I would never go back to a traditional agent. We also knew what we were looking for and needed no hand holding. We saw our house during it’s first open house. We liked it. My husband and I went again a week or so later for another open house and then we made an offer. Everything went so smoothly that we still feel like it wasn’t a house that we just purchased, if that makes sense. Purchasing our first house seemed so stressful and so much work. The best part of Redfin is the money rebated back of course. It has changed a little in the past 2 years but the money rebated back to us paid for our carpet in the basement, refinished our upstairs hardwood flood and new livingroom furniture! And a good thing to know is that the agents at Redfin don’t work on commission as all others do. So there is no reason to push you into purchasing a house so they can make a dollar. They are getting paid regardless of whether you buy or not.

I have some problems with the comment by Mr JT…it’s unfortunate that you had problems when purchasing a house but I seriously doubt it was a Redfin thing. They are not the Walmart of realtors. They are all former traditional realtors that were smart enough to make the move! We loved our experience and would use them over and over again (if we didn’t love our house so much!!).

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[coug90b]

Redfin is outstanding! Traditional real estate agents receive such a large commission for historical reasons: there used to be a large information gap that only they could fill in. This is no longer true, with the internet giving you nearly everything you need to know at your fingertips. (see the book “Freakonomics” for a fuller, more eloquent explanation).

The agents at Redfin I worked with did an excellent job providing the help I needed: with the negotiations, the paperwork, and the buying process.

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[mrhineh]

MrJT, thanks for your input. I have a question about the circumstances, because if an offer is accepted, then you should have a legal document to back that up which a court would validate. Was it a verbal acceptance? How does an agent disappear without you being able to validate that the offer was accepted?

Thank you to everyone else responding too.

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[bilcoh]

MrJT:

My name is Dave Billings, West Seattlite and Market Manager for Redfin here in Seattle. The experience you describe is highly unusual and something I’d want to know about. I hold my teams to much higher standards, and since they get paid salaries and not commissions, I think I have the right to do so. I would greatly appreciate the chance to learn more of the details to ensure this doesn’t happen in the future.

Please feel free to contact me at dave at redfin dot com.

Good weekend to everyone,

Dave Billings

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[findwell]

A little bit of self promotion, if you are shopping for a real estate agent.

We work with quite a few folks in West Seattle and offer a 50% commission rebate. You can learn more about us here:

http://www.findwell.com/buy-home-with-findwell

Kevin Lisota

CEO & Designated Broker

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[Semele]

We bought our place two and half years ago through Redfin. It was our first house and it was a nightmare. if we had to go back we would have gone through a traditional broker. Part of the problem was, after we made an offer our “agent” went on vacation and we got moved over to someone else. We could never get in contact with either.

What was also frustrating was we were on a really strict time crunch due to out of town obligations. The place wasn’t complete as it was new and we were to be out of town at the normal 30 day close date. When asked if we could make the closing a week later we were told “absolutely not, it cannot be more than 30 days” which caused us to have to do a 3wk closing which made the process even more stressful. We found out later a number of our neighbors did a longer than 30 day close so I don’t know if it was Redfin’s policy but it definitely did not help matters out.

Sure, we found what we wanted, but with being a new buyer had a lot of questions about the process and never were able to get any answers in a timely manner. Instead of working with one person we worked with about four and the process was incredibly confusing. We have already decided when we eventually sell our current place we will most definitely use a traditional broker to help sell it and buy the next place.

Not knocking Redfin, but it just seemed to make an already stressful process worse. Good for you for checking out your options!

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[MrJT]

mrhiney – We had signed documents in our hands. The whole transaction with Redfin seemed sketchy from the start, a day or so after the acceptance we are told (by the seller, not the Redfin agent) the house was sold to someone else that came in with a higher bid than ours. The Redfin agent mysteriously had disappeared and then a couple of days later faxed a letter that he had left Redfin. The replacement Redfin agent pretty much told us “too bad”.

Our agent advised us that we could spend a wad of money fighting it, but what would be the point ? So we walked. The best part of the story was that the week we were closing on a much nicer house, the seller called our agent to see if we were still interested.

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[ttt]

We bought our house last December– Klaus showed us a few homes– he was courteous. Kevin was the agent that helped (minimally) to set up the sale. We liked Redfin until about a week before closing.

They set us up with an escrow company near Northgate mall that screwed up paperwork several times. At the last minute the mortgage company we chose decided that the redfin refund looked like redfin was helping us out with our mortgage and we had to jump through extra hoops to get the mortgage approved. If we would have known ahead of time that some mortgage companies have a problem with taking the redfin refund as part of the closing costs, then we would have avoided that option (and taken the cash in hand option instead), but no one from redfin advised us…

I think their business model makes sense (we felt working with a “regular” agent was a rip-off when we sold our last house and they did very little to help us find our first house to earn the thousands they “earned” as the buyer agent…) You just really need to ask LOTS of questions of redifin and how they work, otherwise you may find yourself in a predicament like we did– and mind you, we thought we asked all the questions we needed to and had informed ourselves well…

…the refund was still worth it after we went through the closing headaches though… we’d use their services again, but with more caution, questioning, etc.

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[Homer]

Good to know about Redfin. Think I will give them a try next time. I think with any real estate agency, you have to ask a lot and the right questions as this is a very ‘hazy’ profession.

Our last selling/buying was ridiculous with Windermere. The last owners took the curtains and rods and the shower rods (I know, pretty petty for this one) and this was never in the contract to be taken. Our real estate agent barely helped out and pretty much said “eh, whatcha gonna do”. We had to do all the fighting ourselves (curtains and rods were very expensive ones).

What I really don’t get is that they assume they should make 6 freakin’ percent on the sale of a home today that they did back in 1950 when the house was worth only $50,000. Why do they expect to make the same percentage when they are not doing anything different, in fact less, with the internet nowadays, on the same house that’s now worth $500,000? The house value going up has nothing to do with how hard it is to sell or the more the agent has to do, so why are they earning $27,000 more this time around? If you ask me, traditional agents aren’t worth the money so I say I will try Redfin next time. Thanks for the reviews of them!

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[MrJT]

Hey Homer – If you think they are worthless and disgruntled at 6%, wait until you get one at 1.5%

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[Homer]

Dunno, would think you’d have to make more sales at 1.5% to make more money so you’d be MORE apt to be helpful and make those sales than someone that can count their month good after one sale. Plus, these agents were once 6% agents and willingly went to Redfin…

What makes them think they should still get 6% on a $500k house now that they made on a $50K house 50 years ago….really, they are doing less work.

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[homedk]

As a full-service broker (who does not work for Redfin), here’s my two cents worth. FWIW, I don’t consider myself worthless or disgruntled. :)

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Regarding commissions, keep in mind that a typical 6% commission is usually split four ways. First, it’s divided between the listing office (3%) and the selling office (3%); then each 3% portion is divided between the broker and the brokerage. It doesn’t all go to the broker. Also, the broker’s expenses (office fees, gasoline, vehicle insurance, advertising costs, etc.) are all subtracted from that.

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In this current housing market, I see many brokers working very hard & bringing a great deal of expertise to very complex transactions. As with many professional services, it might be helpful to view it from the perspective that you are paying for the expertise/experience that the person has developed & for their business skills/intelligence; commissions are not just based on how many hours that person spends with you. Many of us spend many hours doing research for every hour we spend with a client.

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It’s true that many buyers don’t need a full-service broker in the sense that they can search online to find all the homes for sale, plus obtain a great deal of information about previous sales, days on market, etc. to help with decision making about price. Sometimes the DIY or the discount approach can turn out well…but I’ve seen savvy buyers who “don’t need hand-holding” get caught up in the excitement once they find a home they want. It is easy to overlook potential flaws or other things that might cost money or become problematic down the road; it’s also not uncommon to “show your hand” at an open house or during the negotiation phase & end up paying more.

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Just sayin’ that a good broker can end up saving their clients money, especially in a complex transaction. A savvy broker can also be a strong advocate for your best interests, bring some valuable perspective to an often emotional process, & help educate you about things that you might not know. I agree that you should ask a lot of questions & do your research when choosing someone to work with you. Many people do find value in working with a full-service broker & I highly recommend it for people that might need some hand-holding through the process.

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Lastly, I’ll comment on the 1950 analogy. Cost of living has increased in this area since then. The work hasn’t necessarily gotten easier; I think it may have become more complex in some ways. Yes, clients are doing more of the “fun” part, the research of finding properties; however, the risk of litigation & the complexity of some of the transactions (foreclosures, short sales, etc.) seems greater now — brokers need to know their stuff, dot their i’s & cross their t’s. It’s also necessary for brokers to know more about technology & marketing in order to compete; there are some very well-educated people with sharp business skills in real estate these days. Personally, I spend many hours in training classes each year; not sure that was the case, or even necessary, for agents in 1950.

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[Homer]

I can see some of your points but honestly, beyond knowing how to close a foreclosure/short sale, I don’t see many “complex” situations in residential real estate. The loans and types seem the hardest and that’s handled by “the bank”. Other than negotiating price and what is/isn’t allowed to be taken from the property at sale, everything else seems pretty standard with a few rare occasions.

Keeping up on the education is great but new technology and marketing??? Everyone in their ~30 working life has to adapt and learn new skills to stay relevant. This doesn’t mean they get more than a cost of living increase for it. At what most get, 3% a year, your commission from the $50K house in 1950 ($3000 at 6% back then), with 3% raises from there on out, would earn you $17,674 in 2010 (or a 3.5% on a 500K house). Why still 6%? Maybe all agents should leave their money hungry companies to join Redfin type companies?

Nowadays, the only place that has ever sold one of my properties or others that I’ve talked to is the internet. They didn’t find it in magazines, or text messages. I’m just saying, these qualified agents like yourself are the ones that created Redfin so what’s the difference and why would I pay more for an agent that is doing the same as another qualified agent that decided to work for Redfin? Just my perspective.

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[homedk]

When I made reference to complex situations in real estate, I wasn’t talking about the basic process, the forms or the mortgage types. I was talking about the complexities that arise during and after transactions (for example, disclosures in the form 17; contingencies; bump clauses; issues having to do with title, resale certificates, HOA’s, easements, etc.). There ARE many complexities, even when everyone plays fair, in that there are often different points of view, different expectations, and varying details. When people don’t play fair, transactions can become even more complex.

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There are many things that a broker learns over time that come from experience & from focusing on real estate as a profession. Most people that I meet who are already home owners, often talk about the things that they learned (sometimes the hard way) as first-time home buyers. The window covering situation mentioned above is just one example of something that a second-time home buyer or an experienced broker would be aware of & write into the contract. Multiply that.

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I’m not going to speak to the overall real estate business model, or the merits of using or working for Redfin. Just trying to dispel misinformation about the commission issue & point out that in my experience there is more to real estate transactions than just researching & finding a property to buy & filling out the basic forms. In this economy, being in any commission-only profession is not for the faint-of-heart. That may be why some brokers opt to move to companies that provide a more consistent income.

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Yes. Marketing & technology…it’s tremendously important, especially if you are trying to sell a property…because so many people are using the internet. I wasn’t thinking of magazines & text messages (although I do text my clients!), but rather things like property videos (not just still photos put to music). It’s important to understand internet marketing & how to effectively present information for different audiences.

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