Redfin is responding to a brand new startup that’s hoping to upend the best way folks seek for and purchase properties by providing a flat-see service.
On August 29, TechCrunch reported {that a} startup known as Landian had emerged from stealth to supply homebuyers a method to tour and make presents on properties via a flat-fee service, relatively than paying commissions.
That firm was co-founded by Josh Sitzer, who sued the National Association of Realtors (NAR) in a landmark case over agent commissions. Under the ensuing settlement, the NAR agreed to pay $418 million in damages and to abolish the Participation Rule, which required sell-side brokers to make a suggestion of compensation to purchaser brokers. That and different rule adjustments are anticipated to remodel the true property market.
Redfin is skeptical in regards to the flat-fee mannequin, though it described Landian as “a brother in arms, keen like us to present shoppers a greater deal.” The 18-year-old firm as soon as tried an identical mannequin, and explains why it didn’t work:
“When we tried this earlier than in a fiercely aggressive housing market, we struggled to win on behalf of shoppers the offer-writing agent hadn’t met, for listings that agent hadn’t seen,” a spokesperson stated. “We additionally realized that when prospects wish to name on the experience of 1 particular person, morning, midday, and evening, it’s a must to pay that particular person very, very properly. For now, we imagine we are able to supply homebuyers the perfect worth through the use of Redfin.com to get rid of the only largest value of being an agent, which is discovering prospects, and by pairing the business’s greatest brokers with lending and title companies.”
Redfin factors out that it costs commissions as little as 1% to dwelling sellers and as little as 2% to homebuyers, and claims to have saved its prospects $1.6 billion in charges,
“Unlike Landian, we don’t cost for excursions or require prospects to rent an agent sight unseen,” a spokesperson stated.
Redfin went on to say that it “could experiment once more” with a flat-fee itemized service. But it’s cautious.
