Updated on October 30, 2019
Redfin is an online real estate brokerage that provides full listing services to home sellers for a discounted rate.
In a typical real estate transaction, the seller will pay a 3% listing fee and offer an additional 3% commission to the buyer's agent - so approximately 6% in total. According to Redfin, it provides full service to home sellers for a 1-1.5% listing commission, depending on the market.
Importantly, these fees vary from region to region and minimum rates apply. That means depending on your home's final sale price, you could end up paying more than 2% in listing fees. Additionally, as of this writing, Redfin's selling service is only available 78 U.S. markets. See if you're covered (and view the minimum listing fees in your market) here.
In contrast, Clever negotiates low commission fees with top-rated, full-service agents nationwide to help you save thousands. Get full service for a flat $3,000 fee - or just 1% if your home sells for more than $350,000.
Note: Our referral service is 100% free and there's never any obligation to sign with one of our agents.
In the meantime, here are six things you should know about Redfin's listing fees to help you determine whether its service might be right for you.
It's Subject to a Minimum
Redfin's major perk is that you pay just 1.5% (or as low as 1% in select cities) for selling your home. There's a catch though - this amount is subject to a minimum based on your market. For example, if you're selling your home in Washington, D.C., Redfin only charges 1%. But, the minimum commission for this market is $5,500. If you sell your home for $250,000 in this area, you'll pay the minimum of $5,500 - resulting in an actual commission of 2.2%.
Excludes Buyer's Agent Commission
Saving 1.5% to 2% on your end of the sale sounds great, but keep in mind you'll still be on the hook for the buyer's agent commission. This is usually in the 3% range and - while negotiable - paid for by the seller at closing. Despite using a discounted agent, still plan to pay 4% to 4.5% of the final selling price in commissions.
Includes a Tech-Savvy Experience
If you're into the latest technology, you'll love Redfin's 3D walkthrough tour, online marketing, email and digital advertising campaigns, and personalized dashboard to see what is happening at each stage of your home sale. Plus, Redfin is known for its well-designed real estate search engine and visitors to your open house register through the Redfin iPad application for immediate follow-up.
The Fee Goes to Redfin - And the Agent Is Salaried
Unlike most traditional real estate agents, in most markets, Redfin agents are employees of the company - not independent contractors paid on commission of a sale. Redfin agents are paid a salary and can earn bonuses. While this allows the company to offer sellers a discounted commission rate when you use a Redfin agent, it may have implications on the service they provide.
Since they earn less overall on each home sold, the focus is on a higher volume of sales - this means a Redfin agent wants to list, get an offer, and close as soon a possible. You may find this business model reflected when a Redfin agent suggests a lower listing price than you may have expected.
Plus, there's less incentive to maintain a good reputation - future sellers using Redfin are likely to use the agent based on the discounted commission, rather than a Redfin agent's history of satisfied clients.
There May Be Few Redfin Agents In Your Market
Think of all the billboards and ads you've seen for real estate agents in your city. You can have your pick of agents based on referrals from friends or family, or online recommendations. In smaller or mid-sized markets, you may only find one Redfin agent for the entire city. While this agent may be great and perfectly qualified, you don't have much of a choice based on specific expertise or experiences from past clients.
Don't Expect a Full Real Estate Agent Experience
While Redfin agents are licensed real estate agents, you may get more attention and more creative solutions from a traditional agent from a local brokerage. Redfin agents focus on a high volume of transactions with lots of clients. But if you prefer to research and are a DIYer, the discounted commission may be incentive enough to go this route..
Regardless of where you find your agent, make sure your agent advocates for you as a seller, instead of just focusing on a quick sale. If you have concerns about a low listing price, do your research and voice your concerns to the agent. They may be correct in their appraisal of your home and can substantiate their numbers to ease your concerns. Or, they may need to adjust it. You should always be fully satisfied with your real estate agent's service. If you're not, voice your concerns to the brokerage and explore using another agent.
How To Get Discount Commissions With a Full Agent Experience
For the best of both worlds, consider using Clever. Clever Partner Agents are top-rated real estate agents from major brands - like Century 21 or Keller Williams - who are experts in their local markets and the value of homes in the area.
They may be the same agents you see advertising in your city and offer the same full service as other agents - the only difference is that they have agreed to work for a flat fee of $3,000, or 1% if your home sells for more than $350,000. This means the same high-quality service, but more money in your pocket.
But, you only get the discount if you connect with the agent through Clever. Contact Clever to learn more and get connected with a top, local Partner Agent who can help sell your home quickly, and for the best price.