I know you’ve made that point before and you’re obviously right. Not only had I forgotten that point, but I missed an opportunity to question Redfin on that point as well…

The person ready to buy the property obviously saw the property with someone, and that someone was not a Redfin agent. At least as I understand the business model.

To Redfin’s defense, I had a conversation with their CEO the other day and he assured me that Redfin does not accept buyers who have been shown a property by an agent. The way I interpreted what he described is that when a buyer comes to them, they ask “How many properties have you seen?” And if the buyer mentions a number then they ask the obvious follow up question, “Who showed you these properties?” He mentioned that this captures most of of the people who are using an agent and that simple conversations capture the rest.

I’m sure it would still be possible to “sneak” through their system, but to their benefit, they seem very aware that they don’t want to get on the wrong side of agents on this issue.

Historically Buyer Agent fees are negotiated in a different manner than listing agent fees. The agent nogotiates the fee down very often to make the deal “work”.

Example: Asking price is $350,000, Buyer offers $330,000, Seller counters at $340,000, Buyer goes to $335,000 and says “Not a Penny More!” Seller won’t budge either. Sometimes the two agents split the difference by reducing their commissions $2,500 each. If the listing agent already discounted the listing fee, he says no. Buyer Agent goes to the Seller and tries to get the seller to split the difference. Seller comes down to $337,500 and buyer agent reduces the commission paid by the seller $2,500.

This is a common form of fee negotiation.

Another is Buyer submits offer to seller asking for washer, dryer and refrigerator that seller did not offer. Seller says no. Buyer can’t afford the house AND a washer, dryer and refrigerator and loves the house. Agent buys a washer, dryer and refrigerator for the buyer so he can have the house he loves. Low priced property, used washer, dryer and refrigerator I don’t think there is an agent in this business for any period of time who has not bought a refrigerator.

Yes, very often the commissions are negotiated inside the transaction at time of offer. But when the Buyer Agent has to pay that big bottom feeder site fee, he just can’t pay anymore and the buyer may lose out on the house they want.

In many parts of the country, HUD 1s are showing the referral fee recipient.

I’m sure buyers would like to know (and should know) if they used up their negotiating power before they even found a house, and it was not disclosed to them.

I think there is a law that says a seller has to disclose to the buyer if he once picked his nose in the den, but there is not a law that says the bottom feeder has to tell the buyer if they take away $10,000 of his negotiating power

“There Oughta Be A Law”.

The issue with Redfin, is they seem to turn a blind eye to whether or not the buyer was working with an agent to find the property before turning to Redfin to write it up. That touches on the issue Russ mentions called “Procuring Cause”.

Sometimes an agent can submit a claim against Redfin or another agent for writing an offer at the end, when they did not ever show that property, or any property, to the buyer. I have one in play now…will let you know how it turns out. It is not against Redfin, but someone who “pulled a Redfin” so to speak.

Redfin may be interested in the outcome as well