Buy Your House Online And Save Thousands

The L.A. Times reports on a spanking-new way to buy your dream house while saving thousands on the commission. The catch: there’s no broker to help find the house.

The Van Eses are using Seattle-based Redfin, one of several new brokerage services that hope to revolutionize home buying by rebating part of their commissions back to buyers. The challenge is aimed at traditional firms that charge full commissions, which often total tens of thousands of dollars in today’s high-priced Southland market.

Redfin, which launches today in Southern California, offers rebates because buyers do much of the groundwork of finding homes via the Web. The brokerage handles the paperwork and conducts negotiations, usually over the phone or via e-mail or fax.

Redfin gives you access to the Multiple Listing Service…

…through which 75% of homes are sold. Once you’ve found your dream castle and prepared an offer, Redfin handles the messy negotiations and paperwork. You receive a 2% rebate on the commission for your efforts.

Redfin is currently limited to Seattle, San Francisco, and Southern California, but promises to head east “soon.” Don’t try this unless you have the time and determination to search listings, make calls, and view homes without a broker. — CAREY GREENBERG-BERGER

Web real estate firms shake up home economics [L.A. Times]


Edit Your Comment

  1. BMR says:

    there is a reason agents get commission, they advocate for you based on their experience. additionally, you don’t always pay their commission out of your pocket, often the sellers pays all associated commissions. Especially for a first time buyer, going with an agent that works for YOU could really save you from a costly mistake with their useful guidance. (FYI – i am not an agent)

  2. crayonshinobi says:

    A lot of brokerages now offer what is called “unbundled services,” which is basically just MLS listings, signage, etc. for a flat fee, not a percentage of your sale price.

    I have to agree with BMR though, if you’re a first time buyer/seller, an agent can be really handy because they aren’t emotionally involved like you might be, and are typically very experienced in the whole process.

  3. kerry says:

    My agent was pretty helpful, even though I ended up finding the place we bought on Craigslist. The main problem we had with her was that she didn’t seem to understand what kind of place we were looking for and kept showing us not-quite-right places. Remember those ads where the couple keeps being shown ranch houses? It was a bit like that.
    That said, she did a great job of being our advocate with the sellers (who were not using an agent) and sweetened our offer to them by cutting her commission (sellers pay commission here). She was also great with the general hand-holding of “this is what happens next, this is what you’re expected to do, this is what they’re expected to do,” etc.

  4. I ended up buying the first place I saw. Everything I saw after it, sucked, so I made an offer in less than a week.

  5. Breticus says:

    I would wager that 90% of consumerists can complete a real estate transaction without the aid of a realtor. I say use redfin and like discount realty services–just be confident and do your homework. With the internets, people can find properties and prices very quickly. Realtors used to hoard this information. They no longer can yet they still expect a 6% commission for the limited services they provide. If you do use a realtor, go a la carte and pay only for the work performed.

  6. medalian1 says:

    When I bought my first home, it was new construction. I went online and found a guy in Orlando (I’m in Tampa, FL) who does rebates for new homes. I listed him as my agent and he got 3% of the sale price of the home and passed 2% on to me. Pretty sweet!

    When I sold that home, I used a flat rate service for $325 who put my listing on MLS. I put a FSBO sign in the front yard. Offered buyers agent commission of 2% (or 2% reduction if no agent). MLS listing automatically gets you on which is the biggest public MLS search apparently. My home sold in 16 days total (only 8 of which it was active on MLS).

  7. Sudonum says:

    Full Disclosure: My wife is a licensed Florida Real Estate Agent

    While getting a rebate on a sales commission as a buyer is pretty sweet, keep in mind that as the buyer you are not paying any part of the commission to begin with. As a buyer you need to keep a closer eye on closing costs with you lender and closing agent. Also get your own agent, do not let the sellers agent represent you in the transaction. You aren’t paying their commission anyway, the seller is.

    When buying new construction if you feel you don’t need an agent, use that as leverage against the builder. I know that I would rather give the buyer a 5% discount than pay 6% to an agent. Be aware that some agents do offer discount commissions to builders.

    Also be aware the many states, including Florida, have laws against agents giving buyers any part of the commission. They also are forbidden from paying finders fees. These laws vary by state.

    And the only reason my wife became an agent so that we could list the properties we build on the MLS ourselves without paying another agent a commission.

  8. Sudonum says:

    Oh, and that builders discount can sometimes help you with the down payment. Because the builder doesn’t want to discounted price to be recorded with the deed as the “sales” price in the closing statement the discount will appear as a separate line item as credit to the buyer so it appears as though the buyer is putting up more money at closing.