One of the “big stories” in yesterday’s Seattle Times, was the piece on Redfin written by Elizabeth Rhodes.
My response is this:
According to the article, Redfin has the ability to reduce the Buyer Agent Fee to 1% of the purchase price. They have an “agent” who never goes to see the property “write up” an offer online, and Redfin gets paid 1% to do that. That assumes that the Buyer Agent fee offered by the seller and the listing company exceeds 1%, which is at present generally the case.
If the buyer only wants to “pay” 1% for Buyer Agent services, if that is the trend, then why wouldn’t I just go out and list property with a 1% Buyer Agent offering in the first place? Why shouldn’t the seller offer 1% and pay only 2% or 3% total fees when he lists the property, with 1% or 2% to the listing agent and 1% to the buyer’s agent?
If the “agent” in Redfin’s backroom is writing an offer without seeing the property for 1%, why wouldn’t the buyer just have the Open House Agent or listing agent write it up for 1% while in the house? At least that agent has seen the house and will know what amenities to write in that might be unique to this property, even if not offered in the mls, like bar stools that match the decor.
Clearly a buyer who can pick a property off the internet, who needs no assistance other than writing an offer and following escrow to closing, can get a real live agent for 1% or even less. Why not use one you can talk with in person inside of the house? If you remove the “responsibility” to assist in property selection from the agent. If you further remove the “responsibility” of the agent to “take care of you” because you are a savvy and informed consumer and don’t need “hand holding”. Then clearly you can negotiate those terms with anyone and still retain the right to “upgrade” the service if needed during the transaction.
The public’s perception that all fees are carved in stone is erroneous. I am concerned that buyers go to less than full service companies, when they can clearly negotiate less than full services with any licensee. Pick the best agent for the job and negotiate the terms. This way if you need greater assistance during the transaction than you thought you might need at the beginning, you have the option to upgrade to what you need, no more and no less.