Dear Redfin Customers,
As many of you have already heard from your Redfin agent, by the end of this week, most local Multiple Listing Services (MLSs) are changing two rules:
- Listings can no longer use the MLS to offer buyers’ agents a commission
- Prior to serving customers, buyers’ agents must disclose our fee
The rules vary from market to market, based on each MLS’s interpretation of the requirements developed by the National Association of Realtors. These rules should make real estate fees more transparent and competitive, goals that Redfin has always championed. Here’s what the rules mean for you:
- For your protection, a fee agreement before the first tour: the new rules require us to get your agreement on our fee before we tour a home with you. We show the fee on Redfin.com when scheduling a home tour. You can sign the fee agreement with one click. Unlike the forms used by other brokers, this agreement doesn’t obligate you to use Redfin; it exists only to set the maximum amount Redfin can charge to be your buyer’s agent. Typically, the seller pays this fee from the proceeds of the sale.
- To commit to a Redfin agent, you can sign a second agreement: Redfin has a separate agreement, which is a simplified version of a buyer’s agency agreement, that does obligate you to use a Redfin agent. We give you this agreement to sign only after you’ve met your agent, so you have a basis for deciding whether to hire her. Except where required by law, this agreement is optional, and your Redfin agent can host further tours with you without an agreement. But signing this agreement before your second tour lowers the commission we charge 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. You can sign our agreement and cancel it later, by emailing your agent that you wish to cancel.
- Our buyer’s agent fee, which varies by market, is very competitive. We set our fee market by market. At least for the customers who sign a simplified buyer’s agency agreement, our goal has been 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. Nearly every Redfin agent is a top producer, held to a higher standard than most traditional agents. Our agents’ expertise and our low fees have the same end, which is to give you the best chance at winning your dream home. If you’re competing against another buyer, the seller could net thousands more from your offer because of our lower fees.
- We do not expect home-buyers to pay our fee in advance of a sale, out of your own pocket. 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.
- Outside of the MLS, our listing customers can still agree in advance to pay a fee in any amount to the buyer’s agent, like 1% or 3% or $10,000, or you can just say the fee is negotiable. Your Redfin agent will tell you how to respond to the competitive dynamics in your market so you can appeal to the widest range of buyers while still maximizing the net proceeds from a sale. We can also work with you to sell your home directly to buyers who don’t want to hire their own agent, so that you have to pay only one agent, not two.
The new rules were designed to benefit you, and the policies Redfin developed in response to these rules should benefit you even more. If you have questions about the industry’s rules or Redfin’s policies, you can ask your Redfin agent!
Best,
Glenn Kelman, Redfin CEO
