I just watched the 60 minute segment on Redfin and the real estate industry. 6% was mentioned often as the going rate which is news to me. I have been under the impression that commission's are negotiable and there isn't any particular number that is "across the board". Aside from that the discussion on Redfin was interesting. A young couple was coached by Redfin in the pricing of their home which they sold within $10,000 of the price Redfin placed on the property. They claimed that they saved $26,000 in commission. They saved commission by paying Redfin a flat rate on the listing side of the sale. They did the work themselves. I don't understand how for a flat rate of $3000 that paid for advertising, staging, brochures, virtual tours, being placed on numerous sites across the internet or did the young couple they pay for advertising themselves over and above the flat fee they pay to Redfin, nor was it discussed how long the property was on the market or if it sold during the recent downturn and slowing of sales. They didn't discuss how it was marketed or much of anything.
My experience tells me that there will be a small percentage of people who are willing to attempt this process coached by agents online. I also think a great percentage of sellers and buyers will continue to want a professional Broker to tackle the process and will be willing to pay for it. It has not been my experience that all seller's are capable of dealing with buyers, with negotiating and whille coaching is great if the Redfin agents are truly churning out deals they won't be able to do the hand holding these deals take. The internet provides a lot of information but it doesn't take the place of experience.
On the east coast we have a company called Foxton's which attempted a somewhat similar centralization of service with reduced commissions and during the height of the market when you could sell a house by simply putting it on the market they had some success. But now you barely hear about them anymore. You would think that if the public were clamoring for this type of brokerage it would exist, but it doesn't.
I would love to hear from the agents out in Redfin country and know their experience's dealing with them.
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