Redfin is experimenting with an even deeper discount on its listing fee in the metro Washington, D.C., area to see if it can “offer even more value and still have it make sense for the business,” said Redfin spokeswoman Rachel Musiker.

Sellers employing a traditional brokerage in the market can expect to pay commissions totaling about 5 percent split evenly between the listing broker and buyer’s agent.

Redfin, which had previously charged sellers 1.5 percent, is slashing its listing fee to 1 percent in Washington, D.C., Maryland and Virginia through at least the end of  year. It will then re-evaluate its listing fee on an ongoing basis, Musiker said.

That means sellers who list with Redfin can still offer a full 2.5 percent commission to buyer’s agents when they list their home in the multiple listing service, and pay a total of 3.5 percent in commissions when the deal closes — 1 percent to Redfin, and 2.5 percent to the agent who brings a buyer to the table.

On the sale of a median-priced $620,000 home, a seller working with a traditional brokerage could expect to pay $31,000 in commissions to real estate agents representing both sides of the transaction. Listing with Redfin, commissions would total $21,700 — a savings of $9,300.

Musiker said Redfin can afford to lower an already below-market listing fee due to a combination of the technology its clients and agents use, “the fact that our agents don’t spend time marketing themselves” and the large number of visitors to

Redfin recently began producing online 3-D models for its listings that allow buyers to explore virtual photo-realistic interiors of properties. Some speculate that the technology could cut down the number of showings that listing brokers would have to coordinate.

Redfin pays its agents salaries and benefits, as well as bonuses on every deal that is affected by customer satisfaction.

Seventy-five percent of a listing agent’s bonus is based on the sales price of a home, while 25 percent is based on customer satisfaction, according to Redfin CEO Glenn Kelman. On the buy side, an agent’s per-deal bonus is tied to the price range of the asking price of a home (not closing price) — but can be cut in half if an agent receives a poor customer satisfaction rating.

Redfin equips its agents with cutting-edge technology, feeds them leads from its popular website and assigns them in teams to clients.

Editor’s note: This story has been updated to correct that Redfin spokeswoman Rachel Musiker was not asked how Redfin could charge a lower rate and still turn a profit. She was asked only how Redfin could charge a lower rate.

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