Technology-based discount brokerage Redfin is experimenting with reduced commission refunds to buyers, and has announced plans to follow up on a trial run conducted in part of Los Angeles during the first quarter, with smaller refunds in the entire Boston market starting this fall.

Redfin, which offers commission rebates of up to 50 percent in other markets, is scaling the rebate back to a maximum of 33 percent in Boston on purchases closed after Oct. 1, CEO Glenn Kelman said in a blog post.

"Big news! Redfin Boston is upgrading our service," Kelman wrote. "Now, whenever you sign up to tour a home or meet an agent, the lead agent who negotiates your deal will also be the one who meets you on the first tour, sees the home and comes to the closing table."

Technology-based discount brokerage Redfin is experimenting with reduced commission refunds to buyers, and has announced plans to follow up on a trial run conducted in part of Los Angeles during the first quarter, with smaller refunds in the entire Boston market starting this fall.

Redfin, which offers commission rebates of up to 50 percent in other markets, is scaling the rebate back to a maximum of 33 percent in Boston on purchases closed after Oct. 1, CEO Glenn Kelman said in a blog post.

"Big news! Redfin Boston is upgrading our service," Kelman wrote. "Now, whenever you sign up to tour a home or meet an agent, the lead agent who negotiates your deal will also be the one who meets you on the first tour, sees the home and comes to the closing table."

Redfin typically employs "field agents," who do not represent clients in negotiations, to conduct home tours. In 2008, Redfin reduced its refunds to buyers from 66 percent to 50 percent, as part of a new cost structuring that included free home tours. Before that, Redfin had provided two agent-led home tours at no cost, and charged $250 for additional tours.

In most markets today, Redfin offers buyers commission refunds of up to 50 percent, but only after collecting a $6,000 minimum fee. So while a homebuyer closing on a $500,000 home with a 2.5 percent commission paid to the buyer’s agent would receive a rebate of $6,250, the buyer of a $250,000 home would receive $250.

Redfin typically won’t represent buyers shopping for homes priced under $200,000, because the commission on the sale wouldn’t cover the brokerage’s minimum fee. Instead, it will refer buyers to Redfin partner agents who have agreed to refund 15 percent of their commission above a minimum of $2,500.

Kelman told GeekWire that the reduced commission rebates in Boston are "an experiment" in Redfin’s smallest mature market, and that the company has no immediate plans to roll the changes out elsewhere.

ZipRealty is conducting its own experiment with commission refunds. On Jan. 31, ZipRealty stopped offering its standard 20 percent commission rebate to buyers in Austin, Texas; Raleigh-Durham, N.C.; Richmond, Va.; and Vancouver, Wash. ZipRealty CEO Lanny Baker has said the brokerage is instead "promoting the experience, skill and connectivity of the agents," in those markets.

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