In a radical move, the high-tech brokerage plans to begin publicly displaying data for all Seattle listings in early October.
Redfin plans to publicly display buyer’s broker commissions on all Seattle listings on its site — not just its own — once new multiple listing service rules take effect Oct. 1, Inman has learned.
First announced in July, the Northwest MLS rule change will soon allow 30,000 agent and brokers in the Seattle area to publish the amount of commission sellers offer a buyer’s broker on their websites, subsequently freeing up Redfin and others to follow suit.
The move comes one week after the high-tech brokerage announced it would begin publishing the compensation it offers buyer’s brokers on it own listings and could signal a tilt toward transparency nationwide, Redfin CEO Glenn Kelman told Inman.
“My experience is that when one MLS makes a shift like this others will follow suit,” Kelman said, referring to the Northwest MLS decision while also adding that if multiple listing services follow suit in other states Redfin would display commission offers in those markets as well. “But I couldn’t name one that is committed to doing that.”
Displaying the commission offers of all local listing agents, not just Redfin’s own, would do much more to raise awareness of how brokers are paid than simply displaying the data for its own listings.
This expanded awareness could spur buyer’s brokers to compete more on price. Displaying the data could also offer Redfin’s site a competitive edge, potentially putting pressure on other search sites to begin displaying the data themselves.
Redfin currently displays commission data discreetly in the property details section of listing pages. But it plans to feature it more prominently in the future, Kelman said.
Redfin can publish commission offers for all listings in Seattle, not just its own, because of a new rule from Northwest MLS that goes into effect on Oct. 1. The rule won’t allow brokers to “opt out” of having their own commission offers displayed on other brokers’ public websites, an NWMLS spokesperson previously told Inman.
“We might be a day late but our hope is to do it when the MLS allows it,” Redfin CEO Glenn Kelman told Inman.
Northwest MLS representatives didn’t respond to a request for comment for this story.
Kelman said sellers are more sensitive to commissions “because they see that price very early in the process of choosing an agent.” That’s why Redfin has focused on its discount listing offering in recent years.
But, with luck, throwing up commission offers will increase the appeal of its commission rebates for buyers, he said.
Kelman said he didn’t know if shining a light on commission offers will put downward pressure on buyer’s broker commissions overall. But when Redfin announced last month that it would display the data for its own listings, the brokerage predicted that adding transparency around commissions should “lead to more competition and lower fees for consumers.”
Kelman said he doesn’t anticipate much pushback from the industry, noting brokers have past “scars” from battles over how listing data would be shared. “My sense is that this will be a fairly straightforward and amicable process,” he said.
“It’s not as if I want to appear in the newspaper goading my competitors into a price war,” he added.
Kelman hopes that displaying commission data will give Redfin’s property search site an edge over listing portals. If this proves to be the case, other sites may follow suit to remain competitive, resulting in the proliferation of the data.
‘On one hand we want the consumer to see the information,” Kelman said, “and on the other hand we want to build the best website. “So I’m kind of torn on whether we want to have this information only on our site or everywhere.”
“I guess we want it everywhere.”