When we were purchasing our “forever home” a couple years ago, we did a lot of the searching on Redfin.com but made the purchase with a full service agent.
Redfin.com is a real estate search site that has full-service agents on staff to help you close on a home.
I would do all of my searches with Redfin.com, go to open houses, and otherwise use the service like my own personal home search engine. At the same time, we had a full service agent who was willing to continue scouring the MLS (multiple listing service, the real estate registration service used by brokers in our geographic area) knowing what we were looking for.
We would eventually find our home through very creative legwork on the part of agent, which I'll explain below.
In using this dual system, I became familiar with the advantages of both methods (Redfin vs. full service agent).
Advantages of Redfin
The number one advantage of Redfin is in cost savings. The standard brokerage commission on a home sale is 6%, with 3% going to the buyer's agent and 3% going to the seller's agent. When you buy with Redfin, they get their 3% Buyers' Agent commission and splits a portion of that with you. The amount is based on a sliding scale and that amount is shown on each listing on Redfin.
I just peeked at a listing for a $397,000 townhome nearby and the commission refund was $2,780 (0.7% of the purchase price).
Redfin is able to do this because they pay their agents on a flat rate, rather than a percentage commission.
Redfin's other advantage, which you get even if you don't buy through them, is one of the most well-designed real estate search engines available. I've looked on some of the local and national real estate brokerages and their searches are abysmal. While you don't get the up to the minute results like with the MLS, it's good enough in a market like this one.
Another advantage in the data each of the listings pull in. If you've ever seen a standard real estate listing, it doesn't have much outside of the specifications of the property. Redfin pulls in from various data sources to include a lot of local pricing data, schools, and even notes from other agents who have visited. It just speeds up the research process.
Advantages of a Full Service Agent
Hands on attention and a better understanding of the area you're looking in. A full service agent, in helping you buy a home, will be vested in trying to get you into your ideal home as soon as possible and should spend the time to understand your needs. They don't get paid when you look at houses so they'll only want to show you the ones they know you'll like.
They will also get creative. When we purchased our second home, our agent knew we liked a certain area and scoured the unsold listings from the last few years and contacted the listing agents. We found a home we loved, arranged a visit, and ultimately purchased the home. You will only get that from a full service agent.
Real estate agents are like anyone other service provider, quality will vary. If you get a really good one, like we did, and it's fantastic. If you get an unresponsive one, someone who isn't as committed or interested in your success, then none of these advantages matter.
What's the big difference?
It comes down to this — Redfin pays you to do more work and helps you with some tools.
A rock-solid full service agent cannot be beat. Someone who is hungry, attentive, and knowledgeable will beat out every single time.
The problem is when you get a full service agent who doesn't give you full service. To avoid that, I'd ask for references or look up transactions they were involved in to learn more about their process and techniques. Do your research because there's a world of difference between a good and bad agent.
Besides the specific agent you get, one big difference is that Redfin will never require you to sign a contract to start looking at houses. Some agents will.
I've heard horror stories where an agent required a buyer sign a contract for a year before the agent would show them any houses. The buyer, not knowing any better, did and then found a new construction they loved which didn't require or need them to have a buyer's agent. They had to either pay off the agent or wait for the year to expire before buying a home! (and you can imagine it was not a pleasant experience)
I understand why an agent would want a buyer to sign a contract. Showing homes is time consuming but I believe that cost is part of the business.
In the end, you get what you pay for. I've never used Redfin to buy or sell a home but folks who have tell me it's very transactional. If you're a DIY type, it's perfect for you. If you need guidance or you'd like someone to search for you, then it's not as hands on as a good full service agent might be. Then again, a bad full service agent is not worth the extra so it comes down to finding a solid agent.
This article supports our Buying Your First Home Guide.