Redfin Ends Commission Savings for Oregon Homebuyers

In Oregon today, Redfin is ending our commission savings for homebuyers, for any customers who have not begun touring homes with a Redfin agent by June 14, 2013. We will continue to charge 1.5% of the final sale price as our fee for representing homesellers, much lower than the average in Oregon. We will also continue to offer commission savings to homebuyers in the 21 other markets we serve, as well as Washington cities in Greater Portland such as Vancouver, Camas and Washougal.

Portland Skyline

So why are we ending the commission savings only for buyers, only in Oregon? And why now? It turns out that an Oregon law against commission refunds to homebuyers is harder to accommodate in a seller’s market.

In our first three years representing buyers in the Oregon real estate market, Redfin found a way to offer commission savings that complied with the law. We asked the seller’s agent to change his or her listing agreement so as to lower Redfin’s commission; we then asked the seller to factor that savings into the price paid for the house or into the closing costs.

This worked well when sellers’ agents weren’t so busy, and when the seller gratefully and carefully evaluated any offer. In 2013, with sellers often evaluating several offers, this approach has proven cumbersome for sellers’ agents and unsettling for their clients.

Why would an agent at another brokerage re-write his contract for a Redfin buyer when another buyer is often willing to pay as much with no changes? Our Oregon homebuying customers want the house more than commission savings, which has made us hesitant to ask for any kind of accommodation in an offer. We can thus no longer consistently deliver commission savings to a homebuying customer without compromising his or her position in a bidding war.

Of course, winning the home or saving on commissions is not a choice a homebuyer should have to make; none do in any other state Redfin serves.

Who’s to blame? The problem is not with the sellers, nor with their agents, nor with the Redfin agents seeking to charge a lower price. The problem is with the law, which makes everyone a party to a circuitous work-around. Rather than asking sellers’ agents to accommodate that work-around for our clients’ benefit, we are looking to address the problem at its source, with the law.

Redfin is thus asking the Oregon legislature to join 40 other state governments, including most recently in New Jersey, in allowing commission refunds. Every Oregon broker should be able to make its own decisions about how to provide value to its clients, without our having to ask one another for permission.

Ending the law against commission refunds is good for consumers, good for free markets and good for the real estate industry. And it’s the only way lower fees for buyers can dependably work in a housing market now moving as fast as Oregon’s is.

In the meantime, Oregon homebuyers will still hire Redfin agents for our unique service: we hold our agents accountable for getting our customers the right house, not just getting the sale, and we use technology to give our customers the best information and the fastest service at every step.

This service is the main reason why Redfin in Oregon has nearly doubled from year to year, into what is now a multi-million dollar business, with 98% customer satisfaction. It is why we expect to continue to grow, whether we offer homebuyers savings or not.  But when Oregon changes its law, we expect to offer commission savings for buyers once again .

(Photo credit: Jami Dwyer on Flicker)


  • franklyrealty

    Respectfully, and I mean that.
    Tell me that you won’t be looking at the results here to determine whether to pull the plug on rebates everywhere else. Seems like the perfect excuse to test the waters. If you see that in Oregon your revenue immediately double, and sales don’t suffer, you won’t use that as a model for everywhere else?


    • keith mccue

      Frankly, I have to agree. Competitively speaking, with
      respect to this Sellers paradigm, Redfin will most likely not lose much market
      share. People who have found Redfins website and online search tools are hooked
      as I am, and will continue to do so. Obviously, Redfin will earn more $$ per
      transaction, increasing their revenue margin per agent deal. Will Redfin
      compensate their agent additionally per transaction? I doubt it!

      This scenario should play out favorably for Redfin, and could/should pave the
      way for reduced rebates in the other markets they serve. And why not? Why shouldn’t
      Redfin make more $$ per deal closed? Is there service any less than other RE
      Brokerages? Of course, any way to leverage Redfin’s bottom line will greatly enhance
      Redfin’s soon to be announced 2013/2014 IPO!

    • Joel Ballezza, Redfin

      Hi @franklyrealty:disqus,

      From the beginning, Redfin’s mission has been to reinvent real estate in the consumers’ favor, and delivering fantastic service for less money is a major part of that. Indeed, Redfin is still offering its commission savings to selling clients in Oregon. Further, Redfin provides a commission refund in all other 21 markets it serves across the country. If the law changed in Oregon to allow it, Redfin would offer a refund there too. The decision to discontinue our commission savings program in Oregon was in the best interests of our clients due to the highly competitive market, as Glenn describes in his post, plain and simple.

      • franklyrealty

        Why was my last comment removed?

    • Bob Gardinger

      What’s the incentive for working with Redfin if not for the rebate? Service-wise, working with Redfin was a very DIY process for me. If it wasn’t for the $2,500 rebate, there just wouldn’t have been any reason not to go with a more full-service realtor.

      • Joel Ballezza, Redfin

        Thanks @bob_gardinger:disqus. Beyond our refund, we offer home buyers (and sellers) a host of services that other brokerages do not. Our agent reviews allow you to find the right partner for your home search, our online document signing tools make the closing process simple and easy to track, and our agents are rewarded based on your satisfaction. This means our team works harder to make sure you land the right home for you. You can read more at, or if you would like we can put you in direct contact with a Redfin agent. Phone: 877-973-3346.

  • Carl

    I hate the emphasis on commission “refunds” and commission “savings” to buyers in this article. Although it’s a common Redfin refrain, the fact is that buyers are not enduring these costs to begin with, or paying anything out of pocket at all 99% of the time. These are not refunds or reduced costs to the buyer – they are straight up credits/checks from Redfin. Nothing wrong with that at all, but I think it would help Redfin’s image in the industry to work less feverishly towards sowing confusion and poisoning the well.

  • Kristin Eberhard

    Dear Redfin – If the Oregon market cools down and sellers are no longer receiving multiple offers, will you reinstate the Commission savings policy? Or, in individual cases where a property in Oregon is sitting on the market, could a Redfin agent negotiate a lowered commission with the seller as part of the price negotiation?