Redfin is responding to a brand new startup that’s hoping to upend the way in which folks seek for and purchase houses by providing a flat-see service.
On August 29, TechCrunch reported {that a} startup referred to as Landian had emerged from stealth to supply homebuyers a solution to tour and make affords on houses by way of a flat-fee service, fairly 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 concerning the flat-fee mannequin, though it described Landian as “a brother in arms, eager like us to give consumers a better deal.” The 18-year-old firm as soon as tried an analogous mannequin, and explains why it didn’t work:
“When we tried this before in a fiercely competitive housing market, we struggled to win on behalf of customers the offer-writing agent hadn’t met, for listings that agent hadn’t seen,” a spokesperson stated. “We also learned that when customers want to call on the expertise of one person, morning, noon, and night, you have to pay that person very, very well. For now, we believe we can offer homebuyers the best value by using Redfin.com to eliminate the single largest cost of being an agent, which is finding customers, and by pairing the industry’s best agents with lending and title services.”
Redfin factors out that it costs commissions as little as 1% to house 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 charge for tours or require customers to hire an agent sight unseen,” a spokesperson stated.
Redfin went on to say that it “may experiment again” with a flat-fee itemized service. But it’s cautious.
