IME, I have a lot of clients who started w/Redfin and decided they needed more expertise and access to hard to find properties or off market properties. Each occupies a particular market niche, from low-cost to high-touch, high fee. Redfin vs. By many measures, Redfin (NASDAQ:RDFN) stands apart from other real estate brokerages. So I think it's easier for them to be more of an advocate for the buyer or seller. But the difference is that Redfin's network, which is going nationwide, those are all employees. The standard brokerage commission on a home sale is 6%, with 3% going to the buyer's agent and 3% going to the seller's agent. I mentioned $80 billion in real estate commissions in 2018. They're not making it on a giant commission, they're making it on getting you into the right mortgage, and then they're making a little extra on getting you a good title that makes sense for the property that you're buying, and so forth. It can't hurt to interview other agents, but if you're happy with what you're getting, then no need to change. Advantages of Redfin. In a competitive market, it may not be the best choice. loans Subject: Re:Selling with Redfin vs. a traditional real estate agent Anonymous +1 Redfin doesn't rebate anywhere close to 1% anymore on the buy side--with a little Googling you can find good cashback agents who will rebate at least 1%. So, you're looking at Redfin agents making twice what the average is for a traditional broker. They're going to show me around and then I'll move to the house down the street." As you mentioned, Redfin, according to data they put out, sells their listings quicker, sells them at a higher average price. I don't want to throw all Redfin agents under the bus but in my experience they are average to mediocre when it comes to servicing clients. Beyers: Well, it's huge, and it's all relationship-driven, much like the rest of the real estate industry. Redfin has reported that their repeat business is growing at a 35% rate relative to their online customers they're bringing in, only growing at a 20% rate. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Redfin Stock Has Doubled This Year. They're also doing all the scheduling themselves, unless they've hired a personal assistant to do that. So why are we talking about the pros and cons of using Redfin versus the other agencies? It's a shame. Here’s my take on the truth as to why Redfin is secretly trying to kill the real estate agent. That's a great model, because it means that the more satisfied the customer, the more that they like the moving experience, the more they're going to come back to Redfin. If you're selling super high-end homes in L.A. and making the traditional 6% commission, you're making more. I don’t know much about them other than checking their site like I’d check Zillow. Because they handle so much of the transaction, the upfront fees in the transaction itself can be lower, because they're just taking a greater part of the overall transaction itself. But overall, as an advocate, a traditional realtor is completely incentivized to get you into the highest transaction they possibly can. A Realtor® must subscribe to the Realtor® Code of Ethics for membership, which includes 17 articles. Compared to traditional real estate agents who charge a 6% fee, REX sellers save $25,000 on average. Redfin houses agents that act as transaction coordinators, helping people buy and sell real estate. (And the inexperience is another.). A RedFin agent’s pay is determined by customer feedback and satisfaction. Just as some long and foster agents are good and some are bad. Bonuses just got much lower this year. You don't really get that with another type of broker. Redfin definitely offers some advantages over the traditional real estate agent, but there are many things that a traditional real estate agent may do better than Redfin. house Pat Cunningham, an agent with Compass Real Estate… If you've listened to Industry Focus for a while, if you've been with us at The Motley Fool, you've probably heard us say, use a fee-based financial planner because their interests are more likely to be aligned with yours. What can you say about Redfin's market opportunity relative to where they stand today? This makes them highly motivated to help you sell quickly and for the highest price possible. Redfin Agents meet customers on Redfin.com, so they don’t spend time looking for new clients—they focus only on you. The average salary for Real Estate Sales Agent at companies like Redfin in the United States is $43,911 as of November 25, 2020, but the range typically falls between $42,897 and $55,854. Happier in your new home Our customer satisfaction rates are consistently higher than the competition, thanks to our technology and local agents. Press question mark to learn the rest of the keyboard shortcuts. Best case scenario you will live paycheck to paycheck and one day your job will be extinct because that's what Redfin wants to achieve- kill all realtors with technology and minimum salary employees. Redfin Pros and Cons A full transcript follows the video. There are definitely exceptions, as in any brokerage, there are great agents, good agents, mediocre agents and the crap agents. The complicated nature of real estate negotiations is why many traditional real estate professionals take issue with Redfin Direct. Redfin Unlimited Liability Company (trade name, Redfin) is a licensed and registered real estate brokerage in British Columbia and Ontario only. I’ve never done this before so I’m not sure how to go about with interviewing agents to try and find the best one for my search. If you are using a screen reader, or having trouble reading this website, please call Redfin Customer Support for help at 1-844-759-7732 . You as a person can't view them on their site, but when you go tour with the agent, you'll get everything a traditional agent has access to via the MRIS. Traditional realtors typically work solely on commission. If you are using a screen reader, or having trouble reading this website, please call Redfin Customer Support for help at 1-844-759-7732 . Redfin, Compass and Purplebricks are world leaders in terms of disruptive real estate agency models. Yesterday, I attended an open house and was encouraged to interview agents to find a realtor who might be more proactive. They don't directly receive a commission, regardless of whether you're buying or selling a home. On this clip from Industry Focus: Energy, Motley Fool analyst Tim Beyers and Industry Focus host Nick Sciple break down Redfin's value proposition to each of the important stakeholders in the homebuying process. If I worked for Redfin, I’d say Redfin. foreclosures Redfin agents provide full service in exchange for a 1-1.5% listing fee. Pro tip: you can type into the search box on Redfin.com “Maryland Agents” and it will pull up a list of Redfin agents in that area. Neighborhood familiarity is important and even if Redfin claims their agent specialize in that neighborhood – it doesn’t matter! Click the red magnifying glass to see your local agent’s profiles. They're still less than 1% market share of total home values sold. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. As their business continues to grow, they can move into more and more of these verticals. So if you start with Redfin, and a Redfin agent, one of the great advantages -- and this is something that we don't talk about a lot. Real estate agent vs Redfin agent? Redfin can handle all of that. Redfin is a broker, with roughly a thousand real estate agents. Redfin Unlimited Liability Company (trade name, Redfin) is a licensed and registered real estate brokerage in British Columbia and Ontario only. According to the Bureau of Labor Statistics, the average real estate agent makes around $46,000. And it could be that you sell it with Redfin Now, which is their instant buyer program; traditionally, by finding the right home using their website, and then getting the broker to do the work for you of getting the title set up and getting the mortgage set up and working with those mortgage arms. Anything around that broker side of the transaction, Tim, that appeals to you as an investor? All of that will be handled entirely within the Redfin family. This is another way that they're aligned with the buyer or the seller -- they make more money when the buyer and seller either save more money or make more money. The number one advantage of Redfin is in cost savings. Agent technology is geared towards iPhone, can be clunky using Android. Market data powered by FactSet and Web Financial Group. lending As a contractor there are a lot of added expenses: licensing fees, Realtor Association fees, continuing education fees, Redfin required car insurance level, printing, gas, etc. Their commission depends on that. If you don’t trust your agent, you shouldn’t work with them. Importantly, these fees vary from region to region and … From the buyer's point of view, or the person participating in the real estate transaction's point of view, there are a lot of things that make sense from a value point of view. First, your Redfin Agent will ask about your selling motivations. Is It a Buy? That 1% or 2% difference can really make a huge difference in the amount of money you take home as a seller, or your effective selling price as a buyer when you have to account for that in the selling price. They're like the fee-based planners of the real estate industry. So, that 1% or 2% really can translate to thousands or tens of thousands of dollars. Nick Sciple: Right, you talk about, when we list out these numbers, oh, you're paying 1% or 1.5% Redfin vs. 3% to a traditional buyer's agent or seller's agent. I've heard, through folks who've dealt with Redfin agents, that this is something that they really like, because they focus on the sale, they focus on the customer, more of their time is focused on the customer, whether it's the buy or the sale. Stacking Up – REX vs. Redfin 2020 “Why America’s real-estate brokers are such a rip-off” – The Economist; Real Estate Agent Commissions Are Shrouded In Secrecy, New Study Shows; 5 Differences Between REX and Discount Brokerages They rent, basically, the right to use the Coldwell Banker name, or, Century 21, or REMAX, which just recently ended up striking a deal with Redfin and then pulling out of it. This means they’re getting paid whether your home sells or not. Redfin agents have served me well on both the buy and sell side. The MLS® mark and associated logos identify professional services rendered by REALTOR® members of CREA to effect the purchase, sale and lease of real estate as part of a cooperative selling system. New comments cannot be posted and votes cannot be cast, real estate So far, I haven’t had issues with my agent, who I don’t have an exclusive contract with or anything, but started to wonder if maybe a buyers agent might put more effort into helping me find my perfect home and really help me negotiate with the seller. Tim Beyers: Yeah, and there are some other things that I think are competitive advantages that I see that I really like as an investor. RedFin agents are paid a salary and benefits. He works for KW. Your agent won’t be there with you or even tour with you. That's huge! You may file a complaint against licensed real estate agents with your state's real estate commission (whatever agency is responsible for the licensing of the agents), but the "complaint" against the seller would have to be a civil suit for damages. Cumulative Growth of a $10,000 Investment in Stock Advisor, Why Buyers, Sellers, and Agents Are Flocking to Redfin @themotleyfool #stocks $RDFN. landlords loan Investing in real estate? Potential buyers use redfin.com to search for and explore listings. It's usually, "I'm going to stay in my regional area. I don’t. To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. Salary ranges can vary widely depending on many important factors, including education, certifications, additional skills, the number of years you have spent in your profession. What kind of questions do you suggest asking the agent? foreclosure, Press J to jump to the feed. On average, homes listed with Redfin sell for $2,800 more** and are 6% more likely to close within 90 days than comparable homes listed by other brokerages. My Redfin guy works for Redfin and isn’t proactive, which is largely my issue. I think of Redfin agents in the same way. REALTOR.ca is Canada’s most popular and trusted real estate platform displaying residential and commercial listings from REALTORS ® across the country. A Realtor® can be a real estate agent, a broker-associate, a managing broker, or an exclusive buyer's agent, and this is just the beginning of the list. The compensation structure for a Redfin agent, you're salaried with a bonus and benefits, you usually get stock options. This only works on your computer, not the app. They do that themselves. It's really a significant amount of money. Thanks for the input. To find Redfin agents in your area go to the Redfin website and click on Real Estate Agents in the top right-hand side. In using this dual system, I became familiar with the advantages of both methods (Redfin vs. full service agent). There are bonuses. Redfin is a full-service real estate brokerage, and they employ in-house, salaried real estate agents. I met the agent I'm working with through Redfin but I'm not sure hes a Redfin agent. Some Redfin agents are good and some are bad. Redfin is a discount real estate brokerage that offers online tools and resources to home sellers and buyers, as well as discount real estate services via its team of in-house agents. Buying and Selling With Redfin vs. a Realtor: What's the Difference? Let's conquer your financial goals together...faster. They aren't strong negotiators and often they split the duties with regards to servicing the client which can lead to confusion at times. Good experience so far and has good knowledge of the area and what houses are going for. The folks who are on a very high end of the real estate brokerage market, of course, will be making more than that. Those bonuses are based on sale price. borrowing Redfin is a company around $1.5 billion today; $487 million in revenue in 2018, going into an $80 billion addressable market. **** They know basic offer making. Choosing an Agent. Certainly, I really like that not only is the average pay package a little bit higher, but the incentives are aligned. They have these classic network effects, both through their online listings, as well as, like we mentioned, those relationships that the brokers have with folks in each one of those communities, the relationships they build with their existing customers. financing Consistent, kind of average, but you could have done better. And that's just not true for a Redfin agent. We are sure there will always be buyers’ agents in real estate. That's just the real estate commissions part of the business. We'll talk about the industry a little bit. houses apartment I'm going to have my regional broker. Can Zillow and Redfin Make Money Buying and Selling Houses? I am currently talking to an agent I met at an open house who really made an impression on me and will be interviewing them. This is all money that you carry on your book. That agent is like a Coldwell Banker agent. A traditional agent with neighborhood experience may have advised us to be more careful around a ‘snake oil salesman’ disguised as a realtor. At SimpleShowing, we provide consumers a team-based approach using advanced technology along with our staff of full-service agents. Sciple: Yeah, and you're seeing some of this in the numbers. When you're a Redfin agent, that support system is built into the company that you work for. Are Redfin agents as reliable as other realtors? Lots of opportunities to continue to grow over time. To distinguish itself from other national real estate firms such as Century 21, Re/Max and Coldwell Banker, Redfin offers a twist on broker/agent commissions — in the form of rebates. Redfin Agents are less incentivized than traditional realtors. On the surface, Redfin is just a real estate agency like Keller Williams and RE/MAX. Stay traditional !!! Redfin offers a small rebate to entice their leads to use their service, but you are getting the McDonalds of real estate experiences. The happier you are, the more he or she earns. buying a house This is a problem that the financial services industry has, too. When you have an industry -- and maybe we'll talk about this later on the show -- like real estate brokerage that really hasn't undergone a lot of change over the past several decades, you have a company like Redfin that is leveraging technology, putting an incentive structure in place that makes sense, both from the person going through, like I said, the real estate transaction's point of view, and from the point of view of the broker, there's just a lot to like there. But for the average broker, this really makes a lot of sense. I recently started my house search a few weeks ago and began working with a Redfin agent who has taken me on several tours. One of them is, a traditional broker, because they're a contractor, they will either recruit or have an office where they pay people to do things like set up the yard sign, clean up the front yard, maybe hire contractors, and that's all on their book. It's good for them to sell at a higher price. That's usually the way it is. You're just getting those services and bringing them to bear. I like that a lot! Already, I get the sense that the service will be much better. Trusted listings from REALTOR® Agents. Actually, Redfin folks have access to the full (in maryland) MRIS listings, as they are actually realtors. In contrast, Redfin Agents are full-time salaried employees. Redfin and other discount brokerages have a very different business model than your traditional Realtor. BUT Redfin is really geared more to the types of buyers that do their own research versus those that want an agent to rustle up listings. The Zillow and Redfin platforms are pretty similar, but the real estate agents they offer are where their offerings really diverge. I am a first time home buyer. You're not hiring that out. There's two sides of this transaction. The guy who is my agent has excellent reviews, and overall, he is a nice guy, but he only has a few years of experience. Once you click on the link, you will be directed to a page where you can enter the city, neighborhood or zip code that you’re looking to buy or sell in. On the buyer’s side of things, we use a refund model and take the middleman out of tour scheduling by providing users the ability to schedule showings and view listings on our website. Again, another important thing to note, we talked about how little they've penetrated their addressable market. SimpleShowing, Redfin, and traditional brokers like Mark Spain share many similarities—and probably equally as many differences. Redfin's thinking much bigger than that. You look at some data as well, Redfin agents earn more on average than the typical broker, at least with the data that I've seen. The MLS package for $399.95 includes a listing on the MLS and syndication on several of the best real estate websites like Zillow, Trulia, and Realtor.com. They get paid ONLY if and when the sale goes through. Traditional Real Estate Agent. Returns as of 12/18/2020. It charges lower commissions, sells homes quicker, and provides its agents benefits that are not available to them elsewhere. This way of operating is really efficient in some ways because Redfin agents do show a lot of houses, but the weakness is that they are often bouncing from one client to the next, from one area to the next. You put this in an industry with an addressable market -- Redfin estimates that there were $80 billion in real estate transactions in 2018. Because REX is the only real estate company not using the MLS to sell homes, our sellers are not obligated to pay a buyer’s agent commission. Sciple: Right. By using our Services or clicking I agree, you agree to our use of cookies. He isn’t as proactive as I think a normal realtor would be, as I mostly look up listings and send them to him to ask him for tours. Traditional, full-service real estate agents typically charge a 3% listing fee when selling a home. When you’re ready to buy a house, we function like a traditio… Nick Sciple: Right, you talk about, when we list out these numbers, oh, you're paying 1% or 1.5% Redfin vs. 3% to a traditional buyer's agent or seller's agent. [10] But much of the magic happens behind the scenes. landlord And when you have something that makes sense both for the customer and for the person providing the service, the broker, it just really makes a ton of sense. Some of the homes I am looking at have been sitting on market for a long time now, but are still fairly overpriced. It is important to note that REALTOR.ca is not an MLS® System. I recently started my house search a few weeks ago and began working with a Redfin agent who has taken me on several tours. If you choose to work with Redfin, your agent is a full-time Redfin employee, and they’ve been vetted and trained by Redfin. Like an army of real estate Terminators, Redfin agents are augmented by technology that vastly improves their power. Redfin's business strategy is to generate leads (that's you) through their website and give those leads to a salaried agent to show houses to. I’m in a market that has switched more to a buyers market. That might not sound like that much money, but when you're talking about a home purchase transaction, this tends to be the largest transaction the average American -- or person, even, in general -- goes through in their lifetime. Agents have to choose to go to work for Redfin. You can have a free, no-obligation listing consultation with a local Redfin Agent any time. mortgages So if you’re shopping for new listing ideas via the Internet, Redfin may be the best choice if you don’t want to waste you (and your real estate agent’s) time. whether it's moving from state to state, like you were mentioning, Tim, or whether it's just, next time they go to buy or sell a home, Redfin is the first place they think of. They are supposed to show a certain number of clients houses every week and have official and unofficial quotas to hit. That means these customers that Redfin is bringing in, they're keeping them around. Nick, we both work in the financial services industry. Let’s take a closer look at some of the pros and cons.of Redfin and some of the pros and cons of a traditional agent. That works for a lot of people. Pricing your home. Yes, Redfin directors cut bonuses for their agents who grew their business. which is typical of real estate industry. See you at the top! There is no incentive to generate the highest possible price. I am starting to feel maybe interviewing an agent might not be a bad idea. Redfin’s technology is visible to consumers mostly on the buyer’s side of its business. foreclosure Redfin agents in general are not proactive - they wait for clients to request viewings on properties the buyer finds. Redfin reports that their median agent salary, including stock-based comp but not including benefits like healthcare -- and everybody knows how significant healthcare costs can be as part of your expenses -- makes $90,000. investing They're expanding their core business with the real estate brokerage, as Tim said, into mortgages, into title insurance, expanding their operation. If you want to stick with Redfin for the refund, do some research and request a new agent. If you start in L.A., and you say you're going to move to Seattle for a job, you could theoretically sell your home in L.A., move up to Seattle, let Redfin take care of the sale in L.A. while you focus on settling in Seattle. Now, granted, Redfin does want to sell at a higher price. Redfin Is Real Estate's Cautious Growth Story, What to Look for From Redfin Over the Next 5 Years, Copyright, Trademark and Patent Information. Stock Advisor launched in February of 2002. So, by offering you more services, and shrinking the time it takes for you to move from point A to point B, and making that a smoother experience, they earn more. You can even setup automatic alerts to get the newest listings with your criteria the minute they come online. This is a company that, really, as it scales, feels like it can become a snowball rolling downhill, and just pick up more and more as things go along. But there also is some appeal for agents as well. He isn’t as proactive as I think a normal realtor would be, as I mostly look up listings and send them to him to ask him for tours. A real estate agent is someone who has a professional license to help people buy, sell, or rent all sorts of housing and real estate. Cookies help us deliver our Services. They don't work for Coldwell Banker, they work for themselves. There are other national real estate brands, but those brands basically are holding companies that have local contracted agents. In my competitive market, creative offer strategies are required, RF agents don't really do that. Another thing I really like about this is that with the equity and salary plus bonus, they're very much aligned with the customer. You compare that to a traditional broker, where you're an independent contractor paid wholly on commission, you're paying for your own health insurance, those sorts of things. 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