Offering buyer rebates never worked out as quite as well as Redfin had planned, and now the high-tech brokerage has given them another haircut in three more markets. But as the broker increases costs for its buyer clients in Seattle, Denver and Chicago, it's doing the opposite for local sellers, rolling out a 1 percent listing fee in those areas. The fee changes reflect Redfin's view that sellers are much more responsive to low fees than buyers. Partly so it could increase its service level and agent compensation, Redfin had gradually scaled back the average rebate it hands to buyers from about two-thirds of the commission split it earns on a transaction to about one-third by 2014. Now it looks like Redfin buyers would receive a rebate equal to around one-fifth of Redfin's commission split if they purchased a typical home in markets where Redfin has instituted its lowest rebates and listing fees -- which include the Washington, D.C., area. On a $549,...
- Redfin has reduced the commission rebates it provides to buyers again.
- But at the same time, it's reduced its listing fee to 1 percent in three more markets.
- The fee changes point toward Redfin's conclusion that sellers respond better to below-market rates than buyers.