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Summary of the article: Redfin reimburses 50% of the fee they receive back to the buyer. And Redfin charges the seller a $5,000 - $7,000 flat fee. In contrast
by sielskr 17y ago
Summary of the article: Redfin reimburses 50% of the fee they receive back to the buyer. And Redfin charges the seller a $5,000 - $7,000 flat fee. In contrast when the buyer and the seller of a million dollar house use traditional Realtors, together the Realtors take about $50,000 or $60,000 of the transaction.
Finally, here is a comment from the Techcrunch article:
I was an active Realtor for 8 years and I’m glad to see something like this taking shape. It’s only a matter of time before real estate agents are entirely obsolete, and for good reason. You used to have to go through an agent to get this kind of information on homes; now the general public has access to that same information.
- jacquesm 17y agoRealtors in the US/Canada make far too much money on the transactions.
- Derrek 17y agoI agree
- edw519 17y ago6% may have made sense when houses cost $25,000. Now that houses cost 10 times as much, do they have 10 times the work on one deal? I didn't think so.
- jacquesm 17y agoIn the Netherlands it's limited by law to 1.85% or so.
- shiranaihito 17y agoYou Win :) That's just a really sensible solution to this "problem".
- grignr 17y agoI agree, but maybe it should be a sliding scale based on what the house is worth. For a $100k house, even Redfin's flat fee of $5k-$7k is more than double the Netherlands' 1.85% cap.
- sharksandwich 17y agoReally? The gov setting the rate is the most sensible solution? It may have worked out well in this case, but that's an awfully slippery slope. I couldn't agree more that the commissions themselves are absurdly high, I just tend to think the gov's role should be to foster a competitive environment that would allow the market to arrive at a fair rate rather than picking it themselves
- shiranaihito 17y agoWell, how do you foster an environment where the market would arrive at fair rate? Without any control, it seems like the rates will get quite high.
- kapitti 17y agoThe realtor themselves don't make that much as it's a pyramid scheme. A realtor splits the commission 50/50 with the broker, and then pays fees (advertising, listing, business expenses, etc) out of their 50%. Take out taxes as well, and real estate, in most markets, ends up being a minimum wage job.
- noonespecial 17y agoThis is really all up to the seller. When we listed out house (albeit in a very different real estate climate), we decided we wanted to get about $300,000. When informed that I'd really be getting $276,000 after "commissions and fees" I simply said, "No you misunderstand, we want $300k for this house." What actually transpired was that it listed for more than 300k (but not 24k more) and both the seller's and eventually buyer's agents decided to take less commission to make a quick sale. These numbers aren't carved in stone. Everything is negotiable. You just have to ask.