Firm says move towards greater transparency may make buyers more cautious
Redfin has followed the lead of the Seattle-area MLS by revealing the commission offered to buyers’ agents for properties that one of its agents has been hired to sell on its website.
From the end of August, most listings on Redfin.com now include the information, which has been added in response to the firm’s research which shows that just 38% of those who bought a home in the past year had "some idea how much money my agent made on my transaction, how the amount was determined and who paid it," and 13% had no idea.
"Across the country, the Multiple Listing Services that agents use to share listing data are now considering whether to follow the lead of the Seattle-area MLS and let brokerage websites publish the commission each listing pays a buyer's agent," said Redfin CEO Glenn Kelman. "But with more than 20,000 homes listed for sale each year by a Redfin agent, Redfin doesn't have to wait for the MLS to give us permission to show the commissions offered to buyers' agents on our own listings.”
Kelman believes that homebuyers could become as careful about commissions as sellers are.
He explained that despite more than a decade of the firm refunding part of its commission back to buyers, the rebate is not well understood as many buyers assume there is no fee as they aren’t charged it directly.
"As a result, over the past five years Redfin has shifted most of our technology-driven commission savings to the seller, not the buyer. Now, as buyers see more and more listings where the commission paid to the buyer's agent is publicly displayed, we expect the marketplace for buyers' agents to become more efficient, with buyers comparing agents' fees just as sellers already do," said Kelman.
