Redfin is selling a new service for buyers in the Boston area. We are exclusive buyer’s agents, and it hasn’t affected us a bit. Why? Because their pitch is aimed at people who don’t know what they don’t know.
Our clients are smart enough to know that they should NOT be managing a $500,000+ negotiation on their own against a professional who is looking to get the highest price for the property.
Redfin Direct is selling the idea that buyers will get their offers accepted because they won’t have an agent that has to be paid. Redfin then poses that having a buyer’s agent is an inconvenience in the purchase. Home tours will be “hassle free” and the buyer gets to “negotiate directly with the seller’s agent.” Notice that the seller still has an agent to advise them about price and terms.
What does it mean to have an agent? Agency, by state law, means that the agent aims for the best price and terms for their client. A seller’s agent is a trained salesperson who is legally bound to work for the highest price for the seller.
For an average house hunter, that can cost them tens of thousands of dollars and lead to the purchase of a money pit. Buyers don’t have time to learn the market like the pros.
Hassle free showing vs how an exclusive buyer’s agent shows a property
“Hassle free showings” means someone is opening the door and hoping you fall in love with the wall color or the staging furniture. Then they can talk you into buying it for the highest price they can wring from you.
Exclusive buyer’s agent showing means your agent is looking for your best deal. You will be getting an evaluation of what is inside the house, based on your needs, as gathered when you saw it together. We get to know what your financial goals are, and help you reach them. We point out what matters to you, like the livability of the property, or the potential for appreciation based on market conditions.
Here’s some examples of what we might point out:
- Do you know how expensive it is to trade-up from your starter condo? There may be a reason not to buy something this small.
- Is this specific neighborhood appreciating well? Our buyer’s agents will know this, and will be telling you.
- As a buyer, you evaluate if your life will fit well in the house, and you might overlook things you’ll hate over time. Here are some examples:
- Did you notice the swampy ground in the trees behind the house?
- During the week, this is a busy road; it’s not so easy to see on Sunday afternoon.
- The house looks like it’s in good condition, but it is 20 years old. Several major components are original, likely to fail within the next 1-5 years.
No one in our office is trying to get the best price for any particular house, so we can keep searching until the right one shows up. Our buyer’s agents show you what may be wrong with the property. There’s no listing agent in our office we want to please by selling the property.
Negotiate directly with the seller’s agent vs Get the resources to negotiate on an even playing field.
A seller’s agent is legally responsible to tell you as much as possible that will encourage you to pay the highest price and choose terms easiest for the seller.
So, what part of this makes you think that negotiating directly with the seller’s agent is going to get you the best deal? Are you in the habit of doing $500,000 negotiations against someone who does this kind of negotiation every day?
Whereas, if you hire an an exclusive buyer’s agent, you’ll see properties with an eye to your goals, have them evaluated on site, have a market study completed so you know the fair market value of the house, then you will be advised how to negotiate with your interests in mind.
Behind the scenes, what is Redfin telling sellers about this?
Sellers are getting their own agent. Redfin’s goal is to save the seller commission fees. The plan, from their website, is:
“to attract unrepresented buyers, we first changed the Redfin.com page that shows a Redfin listing, explaining how to make an offer online, and why that offer could be more compelling to the homeowner.”
In short, it is more compelling to the homeowner because the fees for the buyer’s agent have been cut out to the transaction.
Yeah, but so have the services to you, the buyer!