On the surface, Redfin is just a real estate agency like Keller Williams and RE/MAX. Redfin houses agents that act as transaction coordinators, helping people buy and sell real estate. So why are we talking about the pros and cons of using Redfin versus the other agencies?
Cost Savings – Without question, the number one reason anyone uses Redfin is the cost advantage. The standard brokerage fee during a home sale is 6%. This means the buyer agent gets 3% and the seller agent gets 3%. Of course this fee varies between brokerages depending on many factors but this 6% cost is pretty standard. However, if you buy with Redfin, they give you a portion of their 3% buyer commission. This amount cash back amount can be seen for each listing on their website but tends to be about 1% of the purchase price. This means you would get about $3,000 back after purchasing a $300,000 home with them. Similarly, listing with Redfin can save you some money. Redfin boasts a 1% listing fee as opposed to the 3% standard. This is a savings of about $6,000 when selling a $300,000 house!
Online Tools – While other brokerages focus on the personal relationship between the client and the agent, Redfin focuses on online tools. They aim to make buying and selling real estate as easy as shopping Amazon. Their home search interface pulls from several different sources to tell you more then the MLS can about a property (neighborhood information, utilities, etc.). This interface is easy to use and very informative in comparison with the MLS and is available to use for everyone, not just people using Redfin services*.
*NOTE: Keep in mind, the Redfin home search pulls information from the MLS. Always use the MLS if you want the most up-to-date information. Other services may only update daily or weekly.
You’re probably ready to pick Redfin… cost savings, technology… it sounds like the pros and cons of using Redfin point out a clear victor! But Redfin isn’t for everyone. Here are some benefits of selling with a full service brokerage that you won’t get with Redfin.
Personal Representation – When you work with an agent at a brokerage, that agent acts as your personal representative. They are the market and legal expert who work to make sure the process goes as smoothly as possible for you. Their career depends on your future recommendations, so they will go through great lengths to make sure you come out in the end with the results you want.
As a seller, an agent will…
As a buyer an agent will…
Creative Advantage – Real estate transactions can be a wishy-washy thing. Do you offer to pay closing costs? Do you pay for a new roof or carpet before selling? Do you write a letter to the couple selling, telling them why you deserve the house? There are so many things you can do to win or lose a house. Similarly, there are so many things you can do as a seller to lose or win thousands. An agent will understand the market trends and be able to help you make the best decisions to save you time, money and headache.
If you are just someone looking to buy or sell a house, a full brokerage cannot be beat. You will end up making more money as a seller and saving more money as a buyer if you have an agent who is attentive to the market and proactive. The 6% you pay as a seller can easily be recuperated if you have an agent who prices your house right and gets you the most money possible. On the buyer end, your agent will save you thousands of dollars when the time comes to write a competitive offer that isn’t overly generous.
Another advantage that a full-service agent has over Redfin is that you will have one representative. Redfin optimizes their process by sending whoever is available to meet you and write your offers or contracts. This means you will interface with multiple agents throughout the process, missing out on the opportunity to build a relationship with any of them. Real estate has historically been a people-business, and Redfin misses the mark there.
However, if you’re the kind of person who likes to stay up on the latest real estate market trends, advertise and research yourself, Redfin may be for you. Keep these pros and cons of using Redfin in mind when making your decision. The decision could cost or save you thousands. Get in touch with us if you need to find a motivated brokerage… not all real estate agencies are created equal!