Redfin online service comes to Houston
Offering cuts homebuyer agents, possibly lowering prices in sales
Real estate services company Redfin, seeking to cater to Texas homebuyers who hope to pay less for homes by cutting out the buyer’s agent, rolled out its Redfin Direct program in Houston, Dallas, Austin and San Antonio on Thursday.
Redfin Direct is an online service that replaces buyers’ agents with step-by-step homebuying prompts. Texas is the third market for the service, which piloted earlier this year in Boston and Northern Virginia.
“Redfin Direct is a solution for buyers who feel confident making an offer without an agent — perhaps because they have prior homebuying experience or are working with an attorney — and they want to make their offer stronger by saving the seller money,” Tony King, a Redfin broker in the Dallas area, said in a news release.
The company’s pitch is that sellers may be willing to take a lower price because they won’t have to pay a buyer’s agent. So far, Redfin Direct is available to make offers on homes only listed by Redfin.
The offering comes at a time when fees for buyers’ agents are under fire. Two federal lawsuits are chal
lenging the way agents representing buyers are paid, alleging that the process has artificially inflated the cost of selling a home. The Justice Department has opened an investigation and is collecting information about buyer agent fees and practices.
DIY home shopping
If Redfin Direct is successful, it will show that there’s a sizable population that would forego having an agent guide them through the complicated process of buying a home if it meant trimming that agent’s typical fee of 2.5 percent to 3 percent from the sales price, though they will pay a 1 percent fee to Redfin Direct.
“Today’s homebuyers are savvy, and we think they should be empowered to decide which option is right for them,” King said.
As a slew of nontraditional real estate models have been seeking traction, Redfin’s strategy has been to embrace them all and allow homebuyers and sellers to choose what appeals to them.
The company offers full-brokerage services at a discount; it will also buy homes directly on homeowners’ timelines, an option known as iBuying; with Redfin Direct, it has limited its involvement to providing help with the paperwork.
“Texas is the first state where we’re offering our complete suite of services to help Redfin’s clients make their move seamless,” said Adam Wiener, Redfin’s chief growth officer.
Redfin also offers mortgage and title services, allowing the company to bundle its products. Bundling saves the company money because the time and marketing used to acquire each customer can be used to sell more than one service.
Historically, it has been difficult for brokerages to bundle services because federal law prevents commissioned-based agents from being required to suggest specific mortgage or title companies. But bundling has been on the rise as more brokerages become techcentric, with apps or webpages that suggest their products.