Everyone wants a discount. Obviously. But is cheaper always better? If you’ve lived long enough to know that that is not the case you might be doing a little more savvy shopping these days, especially when it comes to looking for a real estate agent. Places like Help-U-Sell and Redfin have offered real estate brokerage services at a discount for several years using technology to revolutionize the residential real estate business however, many people have learned a lot from Redfin’s work ethic and strategy in order to implement better customer service for traditional brokers.
Redfin began about 10 years ago as a different kind of real estate brokerage. Instead of maximizing real estate agents time and energy they use the Internet to streamline homebuying, which in turn dropped commissions paid by buyers. Even though they do have their own little share of the market they have less than 3% of it overall. It’s interesting that even though they offer buyers a discount and sellers a perk for selling with them, they just are not doing the bang up job they probably expected and this is still due to traditional brokers.
More and more real estate brokerages have embraced web technology and can provide exactly what Redfin does with all the benefits of a traditional broker. Redfin has introduced more personalized service and raised its prices accordingly as well as rebated less of their commission to buyers. They are slowly becoming the traditional broker they originally tried to set themselves apart from. Although CEO Glenn Kelman still says that Redfin is a radically different way to buy or sell a home. It’s a combination of technology and service, although many brokers are providing the same with additional personalized care.
Consumers know a lot more about real estate than they used to. They used to simply trust the real estate agent to give them all the information they need and disregard any info the deemed unnecessary. But today, there is so much information educating buyers and sellers today that consumers are becoming more aware of the process and making more informed decisions on choosing the right agent, brokerage, and home.
More than 90% of homebuyers use the Internet today when shopping for a property and nearly half of them do it from a mobile device.
Redfin has one of the best online home searches there is but when it comes to using an agent, people still prefer that personalized touch. 88% of buyers in the National Association of Realtors survey about their home through an agent, up from 69% in 2001. [Source]
Traditional brokers still dominate in King and Snohomish County and account for over half the home sold on the Northwest Multiple Listing Service. And because most home sales involve two brokers, the buyer’s broker and the seller’s broker, using a broker or real estate agent to facilitate a transaction is really the norm. Redfin in its earlier days offered lower prices than their competitors and rebates to buyers on three-quarters of the customary 3% commission a buyer’s agent usually gets on a home sale. They were used to buyers doing their own research and then finding a Redfin agent to write up and close the deal, but today, many buyers are letting their brokers do all of the work for them as they can find someone they trust, depend on, and so confident in getting the house they want, especially in King and Snohomish county’s extremely competitive market. This is a seller’s market, not a buyer’s market, and buyers cannot simply go out in place an offer on any home they choose. They will usually get denied or rejected.
Today, Redfin has increased its seller’s commission to a 4.5% commission, keeping 1.5% as the listing agent and giving 3% to the buyer’s agent. This is not unlike a typical traditional brokerage. Discount brokerages are a dime a dozen and have tried and failed multiple times. Often, buyers work with multiple agents instead of one from start to finish. Traditional agents have your back from the very beginning and usually help you facilitate lenders, appraisers, and inspectors. Buyers feel more confident overall having one agent facilitate the entire transaction rather than a variety of them trying to catch up from step to step.
So, while Redfin might be a good option for a simple search or to research information, nothing beats the dedication, convenience, and reputation of a traditional broker. Stop wasting your time and money on discount brokers when a traditional broker can actually save you the money you want. Call Mary Pong.