Yesterday Redfin raised commissions dramatically in the Seattle area for home buyers, increasing their fees by 20-39% for many buyers. The price hike is an effort to provide a more personal level of service from their agents and is a change that they’ve rolled out across their major markets over the past 9 months. Seattle and Washington DC were the latest two cities to receive price increases yesterday.
Up until yesterday, if you bought a home with Redfin in Seattle, they would refund 50% of their commission, subject to a minimum fee on lower-priced homes. They’ve removed the formula and calculator from their website, and now you need to look at each individual listing to find out what your potential savings will be, which appears to be calculated by some “black box” formula.
I took a look at a range of properties on their site and came up with the following chart. You’ll see that their rebate climbs from 5%-45%, depending on the list price of the home. Curiously, their announcement of this new program claims a “range between 15% and 50%,” yet the actual numbers on their website tell a different story. The rebate goes to 5% on the low end, and only goes up to 45% (not 50%) on expensive homes. Looks like you’ve got to be a big spender at $950k and above to get the maximum rebate.
Comparing these new fees to their old ones, you can see that they’ve increased their fees pretty dramatically for home buyers in the $400k-$600k range, with a price increase of 20%-39% for the core of the Seattle buyer market.
You might be sent to a partner agent
Below certain price points, you can’t use the services of a Redfin agent. They will shuffle you off to one of their partners at RE/MAX, Keller Williams or other local brokerages. Strangely, this varies by your location on the map and your price point. In central Seattle, you’ve got to spend $200k to use a Redfin agent. In Redmond, this goes up to $250k and in Sammamish, they won’t help you unless you spend $300k. I’ve watched this in some of their other cities, and apparently they tweak these map/price parameters regularly to determine when they’ll help you and when they won’t.
Our approach is different. findwell doesn’t believe that we should pass you off to other brokerages, nor do we believe that buyers of different price points deserve different levels of service. If you are within our service area, one of our full-time agents will help you.
The Service Difference
The logic behind the price increases is that they are able to provide a more personal, 1:1 service from your agent. They’ve finally gotten the agents who negotiate deals out from behind their desk, but only to meet you on your first tour and to see a house you want to bid on. Redfin still has got an army of hourly contractors to facilitate the rest of your home tours and any inspections you need.
Since we started findwell, our approach to personal service has always been different. We believe in a 1:1 agent relationship at all points in the process, and think that the only way we can provide value and expertise is to make sure that we’re there with you every step of the way, whether that is home tours, inspections or otherwise.
Don’t get me wrong, Redfin has a great website for shopping for homes and we’ve admired their willingness to innovate. We just think that there is a better option out there in Seattle when it comes time to select an agent to help you. Give findwell a look before you choose a Redfin agent.