RedfinNow is an iBuyer service that will make a cash offer on your home and close the deal in as few as seven days.
But RedfinNow’s convenience comes at a steep cost. The company’s offer will probably be less than you would get on the open market and they charge a hefty 7% service fee. And you’re still on the hook for the price of repairs and other closing costs.
Read on for an overview of RedfinNow’s iBuying service, what it costs sellers, and alternative options to consider if you want a quick and profitable sale.
What is RedfinNow?
RedfinNow is an iBuyer, a relatively new type of cash buyer that uses local data to make near instant, cash offers on homes. iBuyers then make minor repairs and resell the homes.
The pitch for sellers is that this process is fast and easy; selling with RedfinNow allows homeowners to “skip the stress of a traditional sale” and sell their home quickly and reliably.
This convenience is particularly appealing to those who don’t have the time or energy for a standard property sale. But that convenience comes at a cost of lower offers and a 7% service fee.
How does RedfinNow work?
RedfinNow promises a “radically convenient way to sell a home,” and their process for sellers in indeed dead simple. Here’s how it works:
- Request an offer online: You enter your address on the RedfinNow website. You can upload photos of your home that demonstrate features like flooring, countertops, cabinets, and walls. Then RedfinNow will send you an initial offer range for your home.
- Initial home visit: RedfinNow sends a representative to assess the basic condition of your property. This takes about 30 minutes and requires no cleaning or preparation. Based on that assessment, you’ll receive a formal offer for your home within 48 hours. You have seven days to mull over the offer before it expires.
- Purchase offer: If you’re happy with RedfinNow’s offer, you accept by signing the form online and select a closing date between 7 and 60 days from signing. If you’re not happy, you’re out of luck. RedfinNow doesn’t negotiate on price.
- Third-party inspection: RedfinNow schedules a general inspection of your home by a third party. This inspection takes between two and three hours. RedfinNow might also schedule one or more specialized follow-up inspections. You’ll receive an inspection report detailing all “essential” repairs and an estimated cost for completing them. RedfinNow adjusts their final offer to account for these repair costs or you can complete the repair work yourself before closing. If you disagree with this assessment, you can cancel the sales contract.
- Closing the deal: At closing, you pay standard closing costs, get paid by RedfinNow, and move out of your home. RedfinNow then begins performing repair work on your house and getting it ready to sell to the next buyer.
What does RedfinNow cost?
RedfinNow charges a fixed service fee of 7% of the offer in return for the quick, convenient, hassle-free sale it enables.
However, the story doesn’t end there. RedfinNow arranges an inspection of your home after they’ve made an offer, and they deduct the cost of all necessary repairs from the sales price. These repair costs can take another 1-2% out of your total.
On top of that, you’re still on the hook for the standard closing costs involved in any home sale. These fees vary, but typically include items like title insurance, escrow service charges, applicable HOA fees, and mortgage penalties. Expect these costs to run you another 1-3%.
Finally, it’s important to remember that you pay a convenience premium when you sell to an iBuyer. RedfinNow’s offer on your home — even before its service fee — will most likely be less than the price your home would fetch on the open market. That’s the price of doing business with any cash buyer.
As RedfinNow warns in the fine print of their home page:
“Neither Redfin nor RedfinNow will represent your interests regarding the sale of your home. For this reason, it is recommended that you seek independent representation in the sale of your home. You may be able to sell your home on the open market for more than RedfinNow's offer price.”
But if you don’t have the time or the interest to list on the open market, the lower price can be worth the convenience.
Where is RedfinNow available?
As of October 9, 2019, RedfinNow is only available in ten cities across four states:
- Inland Empire
- Los Angeles
- Orange County
- San Diego
- Las Vegas
- San Antonio
The value of homes RedfinNow will purchase varies from city to city. In Houston, for example, the company will only buy homes with an estimated value between $170,000 and $375,000. In Los Angeles, on the other hand, their purchase range is $350,000 all the way up to $900,000.
What types of homes will RedfinNow buy?
In addition to the price restrictions specific to each RedfinNow market, the company has a list of eligibility requirements for all homes they buy. RedfinNow will typically only consider homes that:
- Are single-family units, townhomes, or condos (pending HOA review)
- Were built after 1960
- Have a total lot size less than half an acre
- Have a clear title
- Are in reasonably good condition
Moreover, RedfinNow won’t purchase homes that:
- Are in an age-restricted community
- Are currently occupied by renters or tenants
- Have aluminum wiring, polybutylene plumbing, or Masonite Woodruff roofing
- Have significant structural issues or termite damage
- Have any unpermitted additions
- Are manufactured or mobile homes
Should I sell to RedfinNow?
Pros of Selling to RedfinNow
- Reliable cash offer. The biggest benefit of cash buyers is in the name — you get cash in hand for your home, guaranteed, in a matter of weeks. Waiting for buyer financing to be approved is one of the biggest factors that slows down (or kills) real estate transactions. If you need to sell as fast as possible, there’s no better way then with an iBuyer.
- Hassle-free sale. When you sell to RedfinNow, you don’t have to put any work into prepping, staging, or marketing your home. Nor do you have to worry about showings, open houses, negotiations, or flaky buyers.
- Flexible close date. RedfinNow lets you choose the closing date that’s most convenient for you. You can use this flexibility to coordinate the move into your next home and avoid paying double mortgage payments.
Cons of Selling to RedfinNow
- High service fee. RedfinNow charges you 7% of their offer in fees. Compare that with the 6% you’d pay in realtor commissions in a traditional sale, or the 4% you’d pay working with a low-commission agent.
- Low purchase price. As with all cash buyers, RedfinNow flips homes and needs to pay less to create a financial cushion on their investment. Expect their offer to be 5-15% lower than what you’d get selling traditionally.
- Additional nonnegotiable costs. RedfinNow deducts the cost of home repairs from their offer, as determined by an inspector. As with the offer itself, this price of repairs is nonnegotiable.
- Limited availability. RedfinNow is only available in 10 cities nationwide and they only consider homes of a certain value that meet strict eligibility criteria.
As RedfinNow is a relatively new offering, online reviews for the service are scarce. As of October 9, 2019, RedfinNow has a single rating on Trustpilot — a one-star review.
RedfinNow’s parent company Redfin has a stronger presence on review sites. ConsumerAffairs rates the company less than two stars based on 34 reviews submitted in the last year, and the Better Business Bureau gives Redfin a D rating and a one-star rating based on 14 customer reviews.
Top Alternatives to RedfinNow
Cash buyers like "We Buy Ugly Houses" have been offering home sellers quick sales at below-market prices for decades. These local cash buyers still have a presence in every real estate market in the country and will be happy to snatch up your home.
RedfinNow isn’t the only iBuyer in the game. If RedfinNow isn’t available in your area or your home doesn’t fit its criteria you have plenty of other options.
Learn more about other iBuyers:
A Full-Service Real Estate Agent
If you’re looking for a way to sell your home fast but at a fair price, consider listing with a full-service real estate agent instead. No matter where you live, experienced realtors know how their local markets work and can list and stage a home to sell fast — and for a better price.
In the end, your next step should be talking with a licensed real estate expert who can help you weigh your options. Everyone’s situation is different; a professional can answer your questions and provide free advice.
Top FAQs About RedfinNow
Does Redfin list on MLS?
RedfinNow’s parent company, Redfin, is a digital real estate brokerage. Sellers who choose to work with Redfin are partnered with realtors who do, indeed, list homes on the MLS and other real estate search sites.
Is Redfin a good realtor?
Redfin is a real estate brokerage. The company provides sellers a comprehensive online platform for selling their homes, which includes the services of a realtor called a Redfin agent.
Redfin claims their agents sell homes faster and for more money than other realtors, but this is aggregated data analyzed by the company itself. The quality of any specific Redfin realtor depends on the agent, property, market, and other factors.
Will Redfin buy my home?
Redfin buys homes through its iBuyer subsidiary, RedfinNow.
If you live in 1 of the 10 cities RedfinNow serves and own a home that meets their buying requirements, the company will make you a nonnegotiable, all-cash offer. If you accept this offer, you can sell your home quickly and conveniently in return for a 7% service fee (on top of repair and closing costs).
Will Zillow buy my house?
Like Redfin, Zillow has its own iBuyer service called Zillow Offers.
There are minor differences between the buying processes of each of these iBuyers. Zillow Offers is available in 19 cities compared to RedfinNow’s 10, Zillow Offers are valid for five days whereas RedfinNow are valid for seven, and — most notably — Zillow Offers service fees range from 6-9% while RedfinNow’s are fixed at 7%.
Which is better, Redfin or Zillow?
Redfin and Zillow both provide the same basic iBuyer service via RedfinNow and Zillow Offers, respectively.
Both companies provide quick, convenient cash offers for homes in select cities that meet certain eligibility requirements. Both companies provide their best offer upfront, less the cost of essential repairs, and can close the deal within a flexible range between 7 and 90 days. In return for this convenience, both companies charge significant service fees that undercut the value of your home.
If this is a proposition you’re open to, then the difference between the two companies is negligible. Your choice between them will come down to where your home is located and how much each service is willing to offer.