[jschoenholtz]

Thanks! We'd love to get you into that penthouse...

When you buy a home, your agent is paid a 2.5% commission to represent you in the transaction. As a real estate brokerage, Open Listings replaces your agent and facilitates the transaction on your behalf. At close, we refund you half of the commission we receive, usually crediting the refund against your closing costs.

Here's a more detailed explanation plus a fun slider: https://www.openlistings.co/our-commission-refund

[ehhuang]

I've heard from multiple agents about how redfin agents don't know what they are doing. Of course, that is just one side of the story, but I'm curious about how receptive listing agents are towards working with you guys in hot markets like SF Bay area. Anything you can share?

[jschoenholtz]

It's not just Redfin agents: a surprising number of licensed agents have trouble with basic tasks like communicating via email and filling out contracts. Since we work as a team, we've built a vast amount of institutional knowledge over the past 5 months and there are no individual, inexperienced agents representing our buyers. We're also automating most of the offer submission process. This means that we're more responsive, more articulate and more accurate than the majority of agents. We also have the privilege of working with smart, serious buyers. We can honestly say that most agents have been happy to work with us and treat us like any other brokerage.

The most important thing to understand is the seller decides which offer to accept and that decision comes down to price & terms. The best offer always wins. 100% of the time we've submitted the highest offer, it has been accepted. Our offers are clean and our buyers are able to pay more knowing they'll get a significant refund. So far, so good.

[xenophon]

Redfinnian here. To add a bit of context to this claim, our agents do four times as many transactions as the most productive traditional agents. This is primarily because we don't have to prospect for leads; our site and mobile apps are great at connecting our agents with prospective buyers and sellers. That's the big advantage of any end-to-end product, and the extra time that our agents have to serve real customers instead of searching for them reveals itself in our higher win rates and customer reviews. Proof's in the outcomes, after all, not in empty words.

And a quick response to the Open Listings folks: Redfin agents actually do work on teams, consisting of Support Agents, Listing and Tour Coordinators, field agents who can help customers homes tour on demand, and deal-writing agents who handle the toughest bits -- negotiations, offer-writing, and general guidance to the customer. Just wanted to set the record straight here.

That said, I love what you guys are doing. This is a big enough market for everyone :) and we're excited to see so many folks adopting alternative transaction models.

[danieltillett]

As an Australian I have always been amazed with that in the USA you have to use a buyers agent. Here you visit the properties yourself and deal directly with the selling agent. Only the buyer pays the agent.

We do have very high stamp duty (basically a sales tax on real estate) which is 5% of the property price which the buyer has to pay.

[Schwolop]

I think you mean that only the _seller_ pays the agent. But yes, I agree the American system is a bit odd. For one thing the listings are WAAAAYYY old by Australian standards - here you list your house with an auction or "sale by" date usually six weeks in the future, and ... it sells (usually). It looks to me like the American system has longer listings because there are fewer open-house inspections - your buyers agent arranges a time to inspect on your behalf, or something like that?

[danieltillett]

Yes you are right - the buyer pays the agent.

At the moment is Sydney properties are selling off market which means 0 day sales. The time it takes in the USA seems amazing long.

[toast0]

You don't need to use a buyer's agent, but it's usually a good idea to have someone at less theoretically looking out for your interest. If you use the seller's agent, that one agent has a big conflict of interest. If you have a real estate attorney (which isn't very common in california, but may be in Australia), then I wouldn't see needing an agent as well.

[danieltillett]

Yes in Australia as a buyer you will have your own lawyer looking over the details once you buy. The problem with buyers agents is their interests are rarely aligned with your own.

[hueving]

Incumbent says competing entrant is not as good. More news to follow.

[jschoenholtz]

Haha - not really! Was saying that most of the criticisms directed towards Redfin agents could be applied to more generally to many real estate agents currently working in the industry.

To date, Redfin has built the best home search tools available. But they continue to reduce their refund amounts and hire agents on salary who work individually in a traditional manner. As a competing entrant, we're trying a different approach. Buyers win because they have more choices.