Redfin Reviews: What You Need to Know Before Buying or Selling
Redfin, one of the largest discount brokers in the United States, boasts about selling your home for maximum value while charging a minimal listing commission of 1.5%.
However, some customers have raised concerns that the discounted price compromises the quality of service. In addition, Redfin customer reviews frequently point out the agents’ failure to provide the promised guidance and support during the home-selling process.
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What is Redfin?
Redfin operates as a discount brokerage firm, providing listing agent services at a reduced commission rate of 1.5% of the sale value. This is lower than the standard 3% charged by traditional agents.
In addition to listing services, Redfin facilitates home-buying by enabling buyers and buyer agents to search for properties and initiate offers through their website.
Moreover, the company assists in connecting home sellers and buyers with local Realtors, and individuals can hire an agent by registering on their website.
Is Redfin Legit?
Redfin is a reputable company founded in 2004 by David Eraker, David Selinger, and Michael Dougherty. In 2006, Glenn Kelman assumed the role of CEO at Redfin. The company underwent an initial public offering in 2017.
Despite its legitimacy, Redfin is currently facing financial challenges, operating at a loss. Its enterprise value significantly decreased from 5.08 billion at the end of 2021 to 1.79 billion in 2022. Additionally, Redfin had to discontinue its iBuyer arm, RedfinNow, last year due to its inability to keep up with the slowing real estate market.
How Does Redfin Work?
Redfin provides real estate agent services to home sellers and connects home buyers with local agents, offering these services at a low commission rate. The company achieves this by implementing various strategies:
- Increasing the number of customers per agent
- Reducing operational costs by offering agents a salary instead of commission-based compensation
- Setting a market-based minimum listing fee ranging from $2,000 to $8,500
Furthermore, Redfin uses their house search app to entice buyers, and they upsell existing clients by giving personalized assistance.
Selling With Redfin
Selling with Redfin is simple:
- Provide your street address and zip code.
- Schedule a consultation with a real estate agent, with the option to choose between a virtual or in-person meeting.
- Complete a series of questions regarding your property and personal information.
A local Redfin agent will get in touch with you for further discussions.
Buying With Redfin
If you’re interested in purchasing a house with Redfin, follow these simple steps:
- Indicate the area where you intend to buy a house.
- Explore the listings available on Redfin.
- Should you find a house that catches your interest, you can schedule a tour, inquire about the property, or initiate the offer process.
- Answer a set of questions regarding your offer and your intended payment method.
- Provide your personal details to connect with a buyer’s agent who will discuss the game plan with you.
The buyer’s agent will handle the necessary paperwork and negotiate with the seller on your behalf.
Redfin’s Services
Opting for Redfin to sell or buy a property is almost like dealing with a conventional brokerage. Let’s examine the comprehensive range of services that Redfin offers:
Redfin Full Service
Redfin Full Service is the basic package designed for sellers. Within this plan, you can avail yourself of the following services for a listing fee ranging from 1% to 1.5%:
- MLS listing
- Professional photography
- Digital marketing plan
- 3D virtual tours
- Open house schedule
- Yard signs and fliers
Redfin Concierge Service
Redfin Concierge is an additional service offered for home renovation. With this service, Redfin’s in-house team will create a design plan and oversee the entire renovation project until it is finished.
However, it comes at a considerable cost, requiring you to pay 10% of the renovation expenses, with a minimum fee of $1,500. It’s essential to note that this service is only accessible in specific markets across the country.
Redfin Premier
Designed for luxury properties priced at $1 million and above, the Redfin Premier plan ensures top-tier service from their most seasoned agents. Additionally, this plan provides access to supplementary offerings such as targeted marketing, home staging, and drone photography.
Despite its premium features, Redfin Premier is priced similarly to the Redfin Full Service plan.
Redfin Partner Agent
In cases where their direct coverage is not applicable, Redfin facilitates connections with partner agents. These partner agents, however, are not salaried employees and do not exclusively work with Redfin.
As a result, they might charge a commission higher than 1.5%. You might be assigned to a partner agent if Redfin is facing a shortage of in-house agents or if your home falls below their minimum price threshold.
RedfinNow
RedfinNow, an ‘as-is’ iBuyer service that provided instant cash offers, was operational until November 9, 2022. However, Redfin has since decided to shut down the RedfinNow service.
Redfin for Sellers
When choosing to sell your home with Redfin, you should be prepared to pay a commission of up to 2.5% of the sale price. Although this is lower than the fees charged by traditional brokerages, it raises the question of whether Redfin is a suitable option for sellers.
To make an informed decision, let’s examine the advantages and disadvantages of selling with Redfin before reaching a conclusion.
Advantages
- Low Listing Commission: With Redfin, you can list your house on the MLS for a commission of just 1% to 1.5% of the sale price. This is significantly lower than the standard 3% charged by traditional listing agents.
Disadvantages
- Inconsistent Service Quality: Redfin agents typically work with a team to coordinate with various stakeholders, aiming to enhance efficiency. However, this approach may lead to errors, communication gaps, and delays due to multiple individuals involved.
- Experience Depends on the Agent: Depending on your location, you may be assigned either in-house or partner agents, and your overall experience can vary based on the agent you work with. Although you have the option to switch agents if unsatisfied, starting anew may result in time loss.
- Limited Agent Support: Redfin’s business model involves agents handling a high volume of clients. This can potentially affect their availability and the level of support they can provide.
Redfin for Buyers
In April 2022, Redfin made a strategic move by acquiring Bay Equity, aiming to transform into a comprehensive one-stop shop for real estate services. As part of this integration, Redfin offers eligible buyers a discount of 0.25% on the standard interest rate if they finance with Bay Equity.
Advantages
- Mobile App for Property Browsing: Redfin offers a user-friendly mobile app that allows buyers to explore properties available for sale and rent. Additionally, they can conveniently schedule property tours through the app.
Disadvantages
- Potential Agent Responsiveness Issues: Some Redfin customer reviews have indicated concerns about agent responsiveness, suggesting that agents may not always be readily available or prompt in their communication.
Redfin’s Fee
When opting to sell with Redfin, in addition to the 1.5% listing fee, sellers are also responsible for paying a buyer’s agent fee ranging from 2.5% to 3%. This brings the total commission to 4% to 4.5% of the sales price.
Here’s Redfin’s commission split:
| Redfin Listing Fee | 1.5% |
| Buyer Agent Commission | 2.5% – 3% |
| Total | 4% – 4.5% |
Redfin Hidden Fees
Redfin does not impose any hidden fees, but it also does not provide upfront disclosure of its minimum fee policy. Additionally, an investor report has highlighted that Redfin has begun advertising its “1%” commission to move-up customers.
Redfin Minimum Commission
Many individuals are unaware of Redfin’s minimum fee policy, resulting in potential surprises when selling their property. In cases where the 1.5% commission is less than the minimum fee, sellers may find themselves paying a higher commission than expected.
Redfin Reviews
In general, Redfin’s reviews are quite varied, with an average rating of 3.3 out of 5 across multiple websites such as Consumer Affairs, Yelp, BBB, and Google.
Positive Redfin reviews commonly commend their real estate agents and user-friendly websites. However, negative reviews and complaints point out issues with inconsistent service quality and unprofessionalism.
Redfin Competitors
Here are some alternatives to consider prior to opting for a Redfin Realtor:
- Houzeo: Houzeo presents an exceptional blend of benefits, including significant savings, cutting-edge technology, and top-notch 5-star customer support. Operating as a fully online MLS listing website, Houzeo boasts thousands of customer reviews.
- Zillow: Zillow attracts an impressive 200 million monthly visits. However, unlike Redfin, Zillow does not operate as a discount brokerage. Instead, they provide agent matching services, assisting sellers in locating local traditional agents for their real estate needs.
Is Redfin Worth It?
We advise against using Redfin for real estate transactions, especially if you seek agent support at a lower commission rate. While Redfin’s 1.5% listing agent fee may appear appealing, it can become a significant cost if you are not matched with a suitable agent.
If you are searching for a more affordable way to sell your house, consider trying Houzeo! Houzeo.com, a tech company, offers an unmatched combination of maximum savings, cutting-edge technology, and exceptional 5-star customer support.
Frequently Asked Questions
1. Why is Redfin bad?
Redfin's downside lies in its lack of consistent quality of service. Despite advertising a 1% listing fee, it effectively amounts to 1.5% unless you also make a home purchase through them within 365 days. Furthermore, Redfin's market-based minimum fee structure can result in sellers paying more than the initially promoted 1.5% listing fee.
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