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Adding Transparency to the Homebuying Process

LendingThe Seattle-based real estate brokerage firm, Redfin, has announced that it will publish the commission offered to the buyer's agent for homes that a Redfin agent is hired to sell on Redfin.com. The company said it believes that displaying the commission will help consumers better understand the costs and incentives in the real estate transaction.

The announcement came after a Redfin survey revealed that more than half of recent homebuyers don't fully understand how their agent was paid. Of people who successfully bought a home in the last year, 38% had "some idea how much money my agent made on my transaction, how the amount was determined and who paid it," while 13% responded that they had "no idea."

"Across the country, the Multiple Listing Services that agents use to share listing data are now considering whether to follow the lead of the Seattle-area MLS and let brokerage websites publish the commission each listing pays a buyer's agent," said Glenn Kelman, CEO, Redfin. "But with more than 20,000 homes listed for sale each year by a Redfin agent, Redfin doesn't have to wait for the MLS to give us permission to show the commissions offered to buyers' agents on our own listings. Today, for most of the homes that Redfin has listed for sale ourselves, Redfin.com visitors can now see exactly how much of a commission the homeowner is offering the agent representing a buyer of that listing."

The Redfin survey also found that buyers who had recent home-selling experience were more confident in their understanding of how their agent was compensated. The survey was fielded in June and included nearly 1,000 respondents who successfully bought a home last year. Redfin segmented the results by comparing buyers who only bought with buyers who also sold or attempted to sell a home in the last year. Of the buyers who solely purchased a home, 61% lacked certainty about how their agent was paid. That number was 44% for buyers who also sold a home in the last year.

About Author: Radhika Ojha

Radhika Ojha is an independent writer and editor. A former Online Editor and currently a reporter for MReport, she is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master’s degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas.
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