Redfin Boston Gets Personal

by Glenn Kelman | 16 Comments

Big news! Redfin Boston is upgrading our service. Now, whenever you sign up to tour a home or meet an agent, the lead agent who negotiates your deal will also be the one who meets you on the first tour, sees the home and comes to the closing table. The commission refund we offer buyers will, as a result, decrease slightly from 50% of the commission to 33% of the commission.

Customers Love the Personal Service
We think this is really going to take off in Boston. We tried it out in one small part of Los Angeles January through March and our customers loved it: you still get an agent on your side, paid to put customers not commissions first, using tools that keep you in the loop at every step. But now that agent can really get to know you and your needs along the way.

A 33% Commission Refund
Our fee for selling a home is unchanged at 1.5% of the home price. But the commission refund for home-buyers changed so that it’s usually one-third of whatever the seller pays us, paid within a few days of closing. For a $500,000 home in Boston, the typical refund would be $4,167. Our main website has all the details on the new commission refund.

Existing Customers, Relax: We’ll Honor the Old Refund Through October 1
Customers who have already contacted us to tour a home, talk to an agent or write an offer will still get the larger refund, usually worth one half of whatever commission we get, on any purchase closed by October 1, 2011.

We’re limiting this new level of service to Boston, but we hope it fits better with what most people want in a real estate agent: the personal service offered by the best agents in brokerages of all types, combined with what really what makes Redfin different, our advocacy, transparency and technology.

If you’d like meet a Redfin agent to see how the whole process works or to learn how the double dip is hitting your local neighborhood, browse the reviews of our Boston-area agents and find an agent you like.

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  • Mtyhach

    Running the numbers for my situation, I'd much rather have the extra 2,125 towards closing costs then the extra service.  I am very glad our P&S is already signed and the Redfin refund in contract.
    Perhaps if you guys disclosed why it costs more for this service I might be more agreeable…..it just sounds like another way to skim more money off the top.

    • http://blog.redfin.com GlennKelman

      Good feedback. We think we'll make about the same amount of money per transaction, but need the additional revenue if we want the senior agent to be able to meet customers in person at the first tour, when making an offer, at the inspection, at the closing. We'll find out if more people would prefer the additional refund, but our intention wasn't to “skim more money off the top.”

  • C'monRedfin

    I am soooooooo disappointed to hear this, redfin!!! It was a no-brainer to go with you guys when the commission was 50%. Now we are all going to be under pressure to sign a deal by October and that is very un-redfinlike. I vote for the old model where customer has all the information, and gets the most bang for the buck when they buy or sell with you.

  • Alex Coon

    Hello All,
    I am sorry to hear that people are disappointed in our price change, but please
    understand we have thought and worked long and hard on these changes.  The
    new price allows us to seriously increase the number of agents we have
    servicing a market and offer an even higher level of customer service than our
    small number of agents has been able to provide.  I think you will find it
    is still a very nice chunk of change back on a purchase and the one-to-one
    service we’re offering means more interaction and connection with your Redfin
    agent. 

     

    We take what we do very seriously here at Redfin and this
    new service offering is a result of talking to a lot of our customers who tried
    our service and ultimately decided Redfin wasn’t for them.  They told us
    they wanted to meet their Redfin agent earlier in the process and have more
    contact throughout their transaction.  So that’s the level of service
    we’re offering beginning today and why we changed our refund amounts.  I
    think everybody will find it to be an improvement; and please feel free to
    reach out to me directly if you have more questions or concerns. 

     

    Thanks,

  • Booo

    I agree.  This is disappointing.  I don't like how a decrease in refund (aka increase in fees) is being advertised as an increase in service.  Most companies try to reduce overhead expenses to pass savings onto the customer.  In this case, Redfin has done the complete opposite.   What does “upgrading our service” mean??

    • http://blog.redfin.com GlennKelman

      Hi Boo, We want the senior agent to be able to meet customers in person at the first tour, when making an offer, at the inspection, at the closing.

  • Boo

    Thanks for the reply Glenn.  Actually, I first got involved with Redfin Nov 09 because of the rebate, but also because I could access MLS and the awesome online interface w/o having the “in your face” experience with a traditional buyers agent.  I understand you are trying to grow your business by listening to people who chose not to use Redfin.  Just be careful not to upset the business model that has worked in the past.  The cut to 33% makes the rebate even lower in Boston where broker commissions are typically 2%, not 2.5% or 3% as the guide suggests.

    • Rob R

      I agree.  I'm new to Redfin and have not yet requested any tours but the reason I became interested in the first place was because of the 50% refund and the use of Redfin's technology all without the need of working to closely with a Realtor.  I liked the original model.  Now I may reconsider using a Redfin Realtor because the decrease in rebate doesn't make as much sense to me.  I hope Redfin reconsider's.  Maybe a better alternative would have been to provide the extra service at no additional cost to the customer and the if your theory is true you will not lose any existing customers but gain new ones and therefore grow your business by volume and with that you will afford to cover your added cost.  To me it seems like the wrong approach.  Also sends the wrong message.

  • SS

    What does “meet customers in person at the first tour” mean? Does the same agent provide every tour or only that first one?

    And what does this mean for your field agents? Are some getting promoted and the rest let go?

  • not such a good idea…

    I have to agree that having no choice in the matter seems like a bad idea – for some people the extra service is what they need, whereas others prefer to save themselves more money by doing more themselves. Why not allow people to choose?

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  • David

    What I find interesting is how many people are more interested in what turns out to be such a minimal amount of money overall? Honestly, if all an individual cares about is saving so little they should just do everything themselves. A buyers agent can be and should be a serious advocate for the buyer.. If the buyer agent did their job properly then they should be able to negotiate the sale effectively by doing a good CMA and justifying a good offering price, in turn saving their client more than what they are trying to save by this % spit in the fist place.. If you have a good agent they will save you that minimal amount of money by providing a good honest and defensible offer. They should acquire buyers because they are known for doing the best work possible for their clients not because they are cheap. Think, honest, ethical and hard working and you will find an agent that will save you more every time.

    • http://blog.redfin.com GlennKelman

      I think there's a way to deliver both quality agents and value David, particularly if as in our case our agents don't have to spend any time prospecting for clients.

    • Country_stroll

      Why do I need a buyer's agent? My experience using several different buyers agents is that they have little interest in protecting buyers. Their goal is to elicit a quick offer for the highest price possible in order to close the deal quickly. The CMAs are a joke. I have personally seen several CMAs that are cherry picked to justify the asking prices. My “buyer's” agents have told me that “distressed” properties are not valid comps for regular sales. I've got news for these agents: anyone selling in this market is doing so because they have some pressing need or other motivation. All sellers are distressed sellers. Furthermore, the CMAs lack necessary factual detail and pricing analysis. Typically, all I get is public information like price, square footage, year built, schools, pool, etc. There is no price adjustment for condition, upgrades, etc. I have yet to receive a detailed comparative market analysis on any of the half dozen offers I made. A good CMA should list the subject property and three recently sold comps with two pages of analysis (roof condition, age of water heater, furnace, piping, termites, schools, local taxes, HOA, etc., with price adjustments up or down from the subject property) . I usually just get the prices, and square footage, and I am told that is the normal way CMAs are done. I then go looking for a new agent. If I am going to spend upwards of $800k for a house in Southern California, the buyers agent stands to receive 24k in commissions. For that amount of money, the buyer's agent can spend a couple of days pulling together a decent CMA! Real estate agents are just lazy and don't particularly care about protecting their clients. Unlike attorneys, they are not legally required to put their clients interests above their own. And as far as contracts are concerned, I can certainly protect myself better than any realtor!

  • LSB

    I'm also disappointed.  I wish I had known this was going into effect…we have been shopping on redfin and going to open houses, but were waiting till next month to schedule tours with an agent, thinking it was best to figure out where exactly we wanted to buy and what we were really looking for in a house before dragging a poor agent all over hell and gone.  Now I wish we had scheduled something this month, because if we had, we still would have qualified for the bigger refund!  Because we waited, we'll lose out on a few thousand dollars, and that's a big deal to first-time home buyers.  It definitely makes me wonder if it's worth it, or if we should just go with a traditional realtor.

  • Brian

    “this new service offering is a result of talking to a lot of our customers who tried
    our service and ultimately decided Redfin wasn’t for them.”

    Uh well the vast majority of feedback of those who worked with RedFin was positive… so why not just come out and say that you needed to charge more.  There are a lot of good traditional agents who will negotiate a similar rebate now that it's 33%.  When you first started your service gave 66% back (though charged for tours).