Redfin touts ‘very competitive’ buyer agent fees
CEO Glenn Kelman laid out what changes consumers could expect when working with the company’s agents, but his message was light on fee details.
Key points:
- Redfin said it will be offering two different buyer agent agreements — one for touring and a more formal contract for buyers who are ready to commit to an agent.
- Kelman said Redfin’s buyer agent fee varies from market to market but called it “very competitive.”
- If a seller doesn’t want to pay the buyer agent fee, Kelman said “we negotiate, just as we would with any other offer term.”
Not to be left out, Redfin is talking directly to buyers and sellers following similar consumer outreach efforts from NAR, local associations and other major brokerage companies.
On August 15, Redfin CEO Glenn Kelman shared a blog post with customers, two days ahead of the deadline for industry practice changes.
His primary message to consumers is that "change is good," but Kelman also spelled out how buyers and sellers can expect to be affected by the new rules.
A choice of two agreements
Redfin was already promoting buyer agreements back in March, rolling out a nationwide buyer agreement rebate program just days before NAR announced its settlement and the practice changes to come.
In the statement he posted on Redfin's website, Kelman said the company will now offer both a touring agreement — which spells out buyer agent compensation, "for your protection" — as well as a more formalized second agreement after a consumer is ready to commit to working with a Redfin agent.
"Except where required by law, this [second] agreement is optional, and your Redfin agent can host further tours with you without an agreement," Kelman said. But buyers will get a break on fees if they opt to commit, lowering their agent's commission by .25% of the home's value.
"Our goal is just to identify which customers want follow-ups and check-ins from our agent, and which just want to be left alone," Kelman stated.
Kelman suggested that the agreements are non-binding, however, noting that buyers "can sign our agreement and cancel it later."
Buyer agent fees will be variable but 'competitive'
Kelman didn't offer any specifics, but he noted that fees would vary from market to market and touted them as "very competitive." He said Redfin's goal is to "offer a lower price than roughly 80% of our competitors."
"We can still deliver the best service at this price because, by pairing Redfin.com customers with Redfin agents, we avoid the primary cost of being a traditional agent, which is the hunt for new customers," Kelman said.
He noted that prospective buyers would be able to see the fee when scheduling a home tour on Redfin's website and "sign the fee agreement with one click," but he didn't indicate whether, or how, prospective buyers could negotiate the fee. The NAR settlement specifies that buyer agreements must include "a conspicuous statement that broker fees and commissions are not set by law and are fully negotiable."
Redfin will negotiate a buyer fee with the seller
In an effort to reassure buyers, Kelman said the brokerage doesn't expect buyers to pay out of pocket in advance of a sale — but he also didn't address the scenario where sellers are adamant about not paying the buyer agent fee.
"When we submit an offer, it includes our fee, which is deducted from the proceeds of the sale. If a seller is unwilling to pay our fee, we negotiate, just as we would with any other offer term."