Which is standard BS and I can't believe people continue to say this. Maybe the seller would have accepted less if they didn't have to pay 6% (which can be tens of thousands on the average deal these days). In the case of redfin the buyer does _ACTUALLY_ pay less for a house since your getting a rebate against the money your spending. Unless the seller is losing money on the deal, it is the buyer that is effectively ponying up the cash to pay everyone (in this case themselves).
I'm also a fairly happy ex-redfin customer, and I can't help but support them if for no other reason than a number of brokerages around me are now creating flat rate schedules to compete.
TLDR: my 2 cents - that 6% is ripe for disruption, so if Redfin have a differentiator maybe that price surge is justified.
For letting, my experience of comparing Hawaii with the UK is that one has to pay around 10% (plus misc charges) for decent quality full service let and management for 12 month contract in both markets.
On the other hand, Which Magazine [1] (a bit like Consumer Reports in the UK) has this to say on sales costs in the UK:
>Multi-agency agreement ... You'll pay a higher fee to go multi-agency - usually between 2% and 3.5%. Given that any estate agent worth their salt will list your property on portals like Rightmove, and being advertised several times in the same place can seem a little desperate, it's probably not worth paying the extra for this kind of contract.
>Sole agency agreement ... is the most common type of estate agent contract. This is the same as sole selling (see below) with the exception that, if you find a buyer yourself, you don’t have to pay the estate agent fees. The typical estate agent fee for sole agency is 1-2%.
That is, overall 1-3.5% for the seller. It's unusual for the buyer to have an agent in the UK.
In summary, letting costs are roughly the same in Hawaii and UK, but is way cheaper to sell in the UK than Hawaii.
Where I live some real estate companies charge a slightly lower (0.5% less iirc) fee in order to try to acquire more sellers. I would imagine this happens elsewhere, so I have to wonder - have there ever been any studies done to see if the agents fee actually has an effect on final price if it is higher or lower than the norm in an area?
I suspect the data already exists to analyze this and we could find out for certain if it is true or not. Part of me feels like it may, but then another part of me wonders if sellers will demand market prices regardless of what their agent cut is, and it isn't like the buyer cares where the money goes - $xxx for a house is the same cost whether the agent gets 3% or 1%
On the contrary, it's ALL paid by the buyer. Think about it, the buyer is the only one putting net cash into the equation. If the seller just takes the buyer's money to give to both of the real estate agents, it's still really just the buyer that is paying everyone.
I'm selling a house right now. We listed at 15% more than we wanted, factoring in the realtor fees and room to give the buyer some negotiation (not being in a super hot market). In both selling that house and buying the new one, almost all companies involved (appraisers, realtors, inspectors) were close to useless (with the exception of the title companies, who did the actual legal stuff off the transaction). There is massive room for disruption in the industry, but also massive inertia.
you get cash at closing from what the seller has paid your Redfin agent. This is either applied to your closing costs or given back to you as a check. So, the argument over who is paying is off topic when the fact is, if you buy with redfin, you'll likely save a couple thousand dollars.
