Redfin is a well-known real estate service with a presence in markets across the USA and parts of Canada. The website offers several tools that provide data on local real estate markets and available homes.
Redfin's main value proposition, however, centers on assisting home buyers and sellers. They offer several different services with the goal of helping their customers make or save money in the real estate market.
Redfin's Pitch to Sellers
Redfin offers sellers the ability to list their homes for a listing fee of as low as 1%. However, there are only certain markets where the listing fee is 1%. That includes cities like Austin, Houston, and Boston. The listing fee in most markets where Redfin has a presence is 1.5%.
There are also minimum commissions that apply in each market for sellers who work with a Redfin agent. That varies from $3,000 in places like Salt Lake City to $5,500 in San Francisco. So customers pay at least $3,000 to $5,500 depending on where they stay.
Redfin also has a program called the Redfin Concierge Service. Sellers who pay a 2% listing fee can have their homes prepped for the sale by Redfin. That covers things like a bespoke home improvement plan, supervised work on the home, and cleaning and staging costs.
There are a few different things each seller gets along with every Redfin listing. That includes a yard sign along with directional signs, so that people in the area know that your house is on the market and can find it. The company hires professional photographers to shoot homes and uses the images in printed flyers.
One of Redfin's unique offerings is the 3D scanning technology it uses to create a walkthrough of homes. This gives sellers access to out-of-town buyers who may be interested in a home but do not see it in person right away.
Redfin's Pitch to Buyers
Buyers who work with Redfin's agents get access to the Redfin app and website. There, they can access updated listings every five minutes. However, a disclaimer on the website mentions it's 70% of MLS listings in the US that are posted inside of five minutes.
Redfin claims to help their customers look at homes before other buyers. In certain cases, customers may tour homes on the same day as they make a booking online.
Buyers also can receive guidance from Redfin's agents. Agents help customers get mortgage pre-approvals and make offers for homes they're interested in.
Redfin's Business Model
It's clear from Redfin's offerings to buyers and sellers that the business works a lot like your standard real estate brokerage. The company hires agents to assist sellers and buyers. They then make a commission that's a percentage of the price of the home.
Besides that, Redfin has also started its own mortgage product in 12 states and Washington, D.C. You must hire a Redfin agent to get a mortgage from the company. Customers are promised underwritten pre-approval with a 25-day closing guarantee on the mortgage. Redfin's mortgages come at competitive rates and relatively low fees compared to other lenders.
Is Redfin Worth It?
As we've already seen, Redfin offers several useful services to its customers. However, there are certain areas where home buyers and sellers could avail of better features and benefits.
One of the main gripes customers have with Redfin is the quality of the service provided by its agents. Several reviews on the Consumer Affairs website mention agents being unable to explain the process clearly or not doing a good enough job with the real estate transaction. This is understandable, since Redfin agents work at heavily discounted prices and cannot provide a full suite of services.
It's also unclear how beneficial some of Redfin's offerings might be to buyers and sellers. For example, MLS listings being updated every five minutes may seem useful, but you're likely to be overwhelmed by the information coming your way at that rate. This is where having a full-service real estate agent helps more than instant access to updated data.
Other features of the service are vague in the way they're stated. The Redfin website says it pays $1,700 on average towards closings costs, but there's no clarity on how this refund is calculated.
A Better Alternative to Redfin
Clever Partner Agents are full-service agents, so they provide their full suite of services to customers — from understanding their requirements to closing the deal. Our agents come from the country's top brokerages and work with Clever clients in the same way they would with any other buyer or seller. We're careful to choose only agents who have established themselves with experience in the local market.
Besides getting a full range of services, buyers are sellers can qualify for various benefits by working with a Partner Agent.
Buyers who hire Clever Partner Agents receive a $1,000 rebate for a minimum purchase worth $150,000 in states where it's legal. Our rebate policy is transparent and buyers know what to expect when they work with Clever.
Buyers also get access to on-demand showings by working with a Clever Partner Agent. This allows you to schedule home tours when you're available rather than having to wait till the next open house.
Sellers assisted by a Clever Partner Agent can list for a flat amount of $3,000 or 1% of the selling price of the home for homes over $350,000. Clever does not have varying minimum commissions in different cities like Redfin. Customers who work with us pay only if (and when) their home is sold.
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