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Commissions are Declining
Across the nation, there’s an obvious trend: real estate commissions are declining. Real Trends, a Colorado research firm announced that the average real estate commission on a property just slid from 5.03% in 2018 to 4.96% in 2019. This is the first time commissions have dipped below 5%. Realogy Corp, the parent company of Coldwell Banker, Century 21, ERA, and Sotheby’s, announced that the average commission amongst its brands fell to new lows – averaging 4.82% in 2019.
Redfin vs. Houzeo.com: How To Compare?
These two real estate firms can be compared on several fronts, but the framework we’ll use is essentially across 8 different parameters most important to home sellers:
- Ease of Listing: Listing Agreement
- Days to List
- Commission Paid, if the Buyer is NOT Represented by an Agent
- Control on Listing Changes: Are Change Contracts Generated Manually or Digitally?
- Does the Platform Send Offers to Home Sellers Immediately Online?
- Does the Platform Offer a Home Selling Guarantee (hint: no one can offer this)
- Is There a Free Listing Option?
- Customer Ratings
Houzeo Affiliate Brokerage Listing Agreements are Less Than 10 Pages. Redfin is 66 Pages
Houzeo has worked hard with its partner brokers to fully digitize and optimize the listing agreement. Most listing agreements with Houzeo partners are 2 to 4 pages, but there are never more than 10 pages. The time commitment to understand and sign a Houzeo listing agreement is usually less than 15 minutes.
Redfin’s listing agreement is 66 pages! The associated time commitment to understand such an agreement and then sign it as a legally binding contract is hours! The company’s Minnesota listing agreement is linked here.
Time to List on MLS via Houzeo is 1-2 Days. Redfin takes upto18 Days
According to Zillow’s Consumer Housing Trends Report, the biggest concern for home sellers is whether they’ll be able to sell their home in line with their desired timeframe. 56% of home sellers reported being stressed out about their selling timeline. Houzeo’s fast listing aims to alleviate this concern. In core markets like Virginia, North Carolina, Florida, Georgia, Tennessee and several other states, Houzeo will get you listed same day or within 1 business day. In most other states, Houzeo listings go live usually within 2 business days, but likely much faster than that.
Redfin on the other hand can take upto 18 days to list and 20 days to your first showing! On page 18 of their listing agreement, Redfin lists a full calendar detailing that the first showing will be 20 full days after the day you decide to list! In today’s world, that’s crazy. Every day that your home sits on the market, it costs money!
Houzeo Charges No Commission to Direct Unrepresented Buyers to You. Redfin Charges 1%
With Houzeo, buyers can approach you directly. Houzeo listing pages have seller contact information displayed so any potential buyers or their agents can reach out to home sellers without Houzeo serving as a middleman. Offers made on Houzeo.com come directly to you, with contact details of the buyer agents, or buyers if unrepresented, in them, so you can reach out. Redfin charges a minimum of 1% additional to represent unrepresented buyers. And on Redfin listings, there’s no seller contact info. So an unrepresented buyer has to go through an agent to reach you, virtually guaranteeing that you’ll pay a buyer agent commission.
Listing Change Contracts are Digitized on Houzeo. Redfin is Manual with a High Turnaround Time
Houzeo Provides an Online Offers Platform. Redfin Does Not
No Reputable Company Should Offer a Home Selling Guarantee
Houzeo Offers a Free FSBO Listing. Redfin Does Not
Customers Have Rated Houzeo Highly at 4.8 Stars vs. Redfin at 1.9 Stars
Detailed Redfin Review
Before selling with Redfin, there are tons of things you must note first. As advertised, you only get to pay a low listing fee of 1%. So, instead of the traditional 3% commission fee for each agent on both sides of the deal, you get to list your property for as little as 1% listing fee—but the question still begs: Is Redfin’s listing fee really 1%? Is it credible and worth it? And how does Redfin make money?
Redfin’s business model is too good to be true. But upon assessing, some downsides come into play. If you pick one of their packages, there are some conditions and limitations you have to consider. To understand how the platform works, and know if Redfin is the right for you, here’s everything you need to know.
Redfin: An Overview
Redfin, a Seattle-based company, is one of the most prominent discount real estate brokerages in the U.S. that caters services for more than over 80 markets. The company’s current value is worth nearly $2 billion with over 2000 agents, brokers, and realtors (paid with a salary apart from their commission). It’s a real estate listing portal that operates as a brokerage which means it earns as a brokerage.
Unlike other real estate platforms that get profits from ads and lead generation, Redfin gets earnings when users sell or buy properties with Redfin’s real estate agents. As opposed to paying 3% for a traditional agent, you can get to choose a listing fee between 1% and 2.5% depending on the service you pick.
Listing your house to Redfin with only a 1% fee is surely tempting. Who doesn’t want to save more money, right? But to say it’s the greatest option, we have to see how it works.
How does selling with Redfin work for sellers?
When selling with Redfin, you’re going to team up with their in-house agent. It’s their salaried employee that doesn’t get the usual commission incentive. Instead, they are paid with a salary whether the home sells big or low. Unlike a traditional real estate agent who depends on the percentage per sale, a Redfin agent gets paid otherwise even if the house is sold below the market value.
Although we can’t be quick to judge, there’s a significant amount of incentive that has been removed from Redfin’s agent earning. And that can affect the agent’s performance or their commitment to sell the house. Also, there are several reviews and reports about their agent’s services. These perhaps due to their high volume of clients and most of their employees have multiple projects or tasks to attend to.
In a nutshell, it still boils down to the price you’re willing to pay for the kind of service you want. At its best, the Redfin’s Concierge Service, for example, will surely get the things done. You’ll get the full treatment expected from their agents, but for a higher price of a 2.5% listing fee. For sellers who are still unsure to try their service, you have to do some little digging and also need to consider the amount of money you are willing to risk.
What are the different Redfin services?
Redfin Now Service
Redfin Now is an all-cash offer for those home sellers who want a quick sale. This means you skip all the hassles in home-selling. Home repairs, open houses, and negotiations will be taken out of your responsibility. However, this service pays less which means you’ll get what you pay for.
For over a few days, you can close a deal and get paid fast. The sale usually closes within 10-30 days after accepting the offer. First, you just have to request an offer online. Redfin then will assess your home’s value and make an offer. Once done, they’ll arrange a home inspection. And lastly, you can close whenever you wish and get paid after agreeing to their offer.
Note that Redfin Now is expensive. The average fees can run from 6% to 12%, which means you pay double for a commission while getting less profit for your home. So, if you are really in a bind and don’t want to stress yourself out with selling, then this can be a perfect choice for you.
Redfin Regular Listing Service
If you choose Redfin’s listing service, you’re then partnered with a local Redfin agent. Also, a package of services that caters to your essential needs in selling your house. The agent will represent you and will help you with the process along the way. To better understand the service, here’s a list of features included and other things they will help you.
- Redfin 3D Walkthrough (a virtual tour of your home).
- Yard signs, flyers, open houses, and other marketing tools to promote your house.
- Personal Owner Dashboard that manages how your home is doing—online listing views, etc.
- Digital ads and email marketing campaigns to widen reach online, such as Google, Facebook, and other channels.
- Featured premium placement of your home online on Redfin’s website.
- A thorough comparative market analysis (CMA) that helps show recent comparable home sales.
The overall package includes a 1.5% listing fee instead of the typical 2.5% to 3% listing free. But for sellers who want the best of all the best services Redfin can offer, they have a Concierge Service who brings exactly that.
Redfin Concierge Service (not available to all Redfin markets)
For the premium and complete package, the Concierge service can give you everything included in the standard listing service. Besides these features and services, a Redfin expert will evaluate your home and create a plan to attract more buyers.
Redfin will take care of the major details to get the attention your house deserves. From the home preparation to the final process, the Conceierge service aims to guide you every step of the way.
Redfin boasts its Concierge Service for it sells 15% faster than other homes in the market. The package comes with a 2.5% listing fee which is still cheaper than the traditional agent commission. However, if you really think about it; you still need to offer a buyer’s agent commission of 3% whether whatever package or service you pick. The total commission would still range from 4% to 5.5% you are going to pay.
The real question is—
How much do you save selling with Redfin?
Although Redfin says you can list your home for a 1% commission, their regular or standard listing fee is actually 1.5%. You can only get the 1% listing fee if you buy and sell through Redfin, which means you have to sell and buy a property via their service.
Furthermore, you still have to pay your Redfin buyer’s agent a 3% commission from your home sale. That means to say that it’s not really a 1% commission fee if you think about it. At times, there are certain conditions too that could exceed the actual 1% listing fee. You also need to check if Redfin offers the minimum listing fee in your state. Otherwise, you have to pay a 6% commission for an affiliated partner agent.
So that means you aren’t actually saving, but instead, you’re still spending a huge amount of money to list your home. And more often than not, you have to thoroughly read and review some conditions they’ll impose. To further understand how Redfin is doing compare to other competitors, let’s evaluate them to different real estate business models.
Redfin vs Traditional Agent
The key difference between the two business models is how Redfin and the traditional agents earn their living. Redfin’s agent usually gets earnings through their paid-based salary and often bonuses based on their client’s feedback. Although these may sound good for them, agents also tend to abuse and don’t work hard to fully satisfy their clients— why do your best if you’ll get paid anyway?
On the other hand, traditional agents work for commission fees. That’s the more reason why traditional agents sell a property as quickly as possible while getting the best deal. Well, the amount of cash traditional agents can grab depends on the final sales price. And the quicker they sell the house, the sooner they get paid.
Yet let’s not surmise ahead how Redfin agents can’t do their work well. The Concierge Service, for instance, offers the full real estate service experience, with online tools and additional help from experts—but for a higher price.
Working with a traditional agent is like teaming up with a business partner. You both want what’s best for your home. But buying and selling with Redfin may seem questionable since the level of their commitment depends on the price you pay.
Redfin vs Zillow
As one of the best real estate websites, Zillow shares some same features as Redfin, especially the property listings and home value estimates (Zestimate). Still, while both platforms use data analytics to get home estimates, the methods and factors are distinct. But what makes them really distinguishable is through their agents.
Zillow doesn’t get their agents from their own company. That means most of the agents on the site paid Zillow to be on the site—others paid more to get more visibility to clients. While Redfin, is a full-service real estate brokerage, employs a real estate agent who is getting paid a salary. In other words, they are in-house employees who belong to the Redfin company.
However, it doesn’t mean Zillow’s agents are unprofessional. Actually, these are highly-trained agents who have extensive experience and can help you increase your home value and get the home sale done.
Redfin vs Houzeo (Flat Fee MLS/ For Sale by Owner)
Houzeo is not your ordinary flat fee MLS and FSBO service provider. It’s one of the most advanced For Sale by Owner websites available. Once you’ve decided to list your home, the overall process runs like butter—all essential documents and listing paperwork, all online! What’s more, there are no hidden costs at closing and no listing agent commission.
A standard flat fee MLS charges a listing fee then just leaves you at the market alone. But at Houzeo, packages are tailored to suit your home-selling needs, from basic to full service. You’ll be listed on big online platforms like Realtor.com, Zillow, Trulia, and 100s more other websites.
Besides, Redfin’s 1% listing fee may seem not appealing compared to Houzeo’s pricing package—only $199 to start listing. It’s even less than Redfin’s 1% listing agent commission. Also, listing your property with Redfin may subject to a lot of limitations and some states aren’t even available.
Though Redfin has online tools and gives your own dashboard, Houzeo also offers IntelliList Listing Management System. In a way, it helps manage your listing details, signs your Listing Agreement online, and tracks listing progress. So basically, it does the same thing with Redfin’s feature but for a lesser price.
If you’re looking for the most advanced Flat Fee MLS/FSBO platform that doesn’t burn a hole in your pocket, visit Houzeo and list your home.
Redfin Reviews (2020)
Well, you can’t please everyone, and it rings true with business too. But looking at it, Redfin scores 4.5 out of 5 stars in Yelp, while a B rating at the Better Business Bureau. To get a good idea of what most of the people think after trying Redfin’s service, let’s take a look at their reviews in 2020.
Source: Consumer Affairs
Overall, the satisfaction rating is two stars out of 5 based on 89 ratings. But if you scroll down enough, you can still see a few good reviews. However, a lot what’s written by these reviewers focuses on the responsiveness of their agents—and often about the service. So, as a seller, it’s best to be careful and find out first if the agent can really commit to helping you sell your home.
Is selling with Redfin a good idea?
Like most of the real estate platforms out there, there are also pros and cons in selling with Redfin. If you’re a serious seller who wants a fair and big sale, you need to weigh the possible pitfalls and benefits. As mentioned above, Redfin offers low-cost yet effective tools and features to market your home. However, the downsides come from their agents’ efficiency, and often company conditions you have to follow.
But the most negative factor that changes the good Redfin experience is their in-house agents. Although they also receive some great feedback, some clients are not happy—and it mostly pinpoints to the area of communication or responsiveness.
So, is it worth it? Well, it depends. If you’re fully prepared to sell your home and have done some research, then Redfin can be a great platform to increase your visibility. But if you want a full-service or tailored-kind of home-selling with little or zero commission, a Flat fee or FSBO can do both that.
Houzeo is a great option to try for your home-selling experience. Just list your property on MLS via our website, you get the whole process done in no time. Houzeo is the most advanced FSBO platform that offers basic to premium packages that don’t put a hole in your pocket.
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