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Hi MSM Readers! I’m Lily, I’m a millennial money blogger at The Frugal Gene. It is a spectacular treat that the kind Mr. MSM has allowed me, a wee one, to guest post! Wee! O.K., so I was born in a seaside village in Southern China. My parents never finished high school and they did everything they could to immigrate to America so I get a better chance at life. Me & my husband are the ultimate millennial super savers. We scrimp, save, and work our bums off to save over $100,000/year in the grandest pursuit of financial freedom. Hubby & I live our lives car-free and debt free. We moonlight as your coffee pouring hosts on AirBnB. It’s a total dance party @ thefrugalgene.com
TV vs Reality
I love binge watching HGTV home shopping. But when it comes to a home purchase of my very own – it only concurs up bad memories of walking on hot pavement, rushing from property to property, and waiting on the gut wrenching offer review period. If you are in a competitive seller’s market like we are in Seattle, consider yourself lucky if you get only a month of sleeping on pins and needles.
The partial checklist for the mental anguish goes:
“Will they respond to us or let our offer expire?”
“What if the appraisal goes for much lower?”
“What if the inspection fails to find something?”
You know on TV the couples sometimes bicker about what they differ on in terms of houses? It’s always something like location, price, size what have you but no one fights about how you should choose a real estate agent. A proper real estate agent can make or break your entire home shopping experience. The median purchase price for a house in our neck of the woods just hit $700,000. Trust me, home buying is not something you (and/or your spouse) would want to go through alone. But that is exactly what we did.
Background
A house is undoubtedly the most expensive purchase most American will make in their lifetime and me and my husband had the ‘good’ fortune of doing it twice! We bought two houses within a year of each other. Our first home is a modern 3 story townhouse in a sleepy suburban neighborhood. Our second property is a rental property. It is a small unassuming cottage near a gigantic pristine lake in one of Seattle’s most beloved neighborhoods.
Traditional Agent
On our first home purchase we went with a traditional full-stop real estate agent from a well known and well respected local firm. Let’s call her Ms. Traditional! Ms. Traditional was a no-nonsense realtor. She knew we were in a rush to buy since our apartment lease downtown was ending in 2 months. Ms. Traditional knew I detested looking at houses and being disappointed when none of the overly-shopped photos accurately depicted the size or maintenance of the actual properties. She zeroed in on our taste and we toured her recommendations.
Now Ms. Traditional Agent was far from the perfect real estate agent. Perhaps it’s her Nordic mannerisms that rubs off in her communications but whoa, she was so cold and so collected. It might just be because she’s just a Seattleite, born and raised. She rushed us through many of the houses and we felt like an inconvenience standing next to her. But to her credit, she knew what properties we liked and what we didn’t liked within minutes. Ms. Traditional had either a lot of experience or we’re stock characters that she has pin pointed down to a science but the important thing was…she knew.
I’m Done
Ms. Traditional conjured up a full list of houses for us to scope. Running around town was normal to her but exhausting for me and my husband who were regular 9 to 5 desk rabbits. We found and settled on our first ever house in 3 days. Yup, 3 days! I, honest to God, told Ms. Traditional – “this is good enough, I’ll take it. Please don’t make me look at anymore.”
The negotiation process was uneventful. How can high stake negotiations be uneventful?
Easy. Traditional agents earned a percentage of the total commission so Ms. Traditional didn’t exactly have incentive to fight tooth and nail for us. The seller’s agent also shared the same firm as Ms. Traditional. The seller’s agent and Ms. Traditional were actually friends and have worked together before! Hmmm… This was something that annoyed me. We didn’t feel like we got the best price but we were only off by $2,000 and the sellers covered at least $3,000 in repairs for us after the inspection. They even included a welcome home basket for us when we first moved in. And yes, we were under a 2 month time crunch so it was probably good that no one rocked the boat :-)!
Redfin Agent
Our second purchase was through Redfin, the well known nontraditional online realtor. I love the Redfin mobile app. We have tried apps like Zillow (inaccurate since they’re not an actual MLS), Trulia (owned by Zillow), and Realtor (decent). Redfin has a home estimator that it isdead-on. Since we were consistently using it as a home shopping tool and more than impressed by the accuracy, we thought we would give a real Redfin agent a try with our second property. Plus, that Redfin commission rebate sounded sweet! After our first property, we assumed we had garner enough experience and knowledge to know what we were doing. We could forgo a full-stop agent for some extra green in our pocket, right?
This is where our troubles began…
Choosing Redfin
On the Redfin website, after you have chosen a Redfin agent you would like to work with, it’s only natural to assume you would be working the most with that person right? Nope.
We saw our actual agent, let’s call her Ms. Redfin, a total of 3 times in a span of an entire month. She was never, ever available on any of the weekends and her 3-day weekends “trips” were frequent. We were bounced back and forth by her support team.
Touring
There is no consistent right of contact. Every time you want to see a property, it’s automated to a touring agent whom you most likely have never met and knows nothing about you. Bad idea.
We found one awesome Redfin touring agent who was upfront with us and showed up how much he care by staying late and talking to us about the property. I was charmed! I wanted to tour with him and only him! My husband and I kept contacting Redfin to set us up again with that specific touring agent but he was never, ever available. We never saw him again!
On all the other home tours, we were stuck with touring agents who were simply there to unlock the door. They didn’t give us any insight beyond the superficial. None of the touring agents were experts in any of the neighborhoods we saw.
Usually a traditional agent picks you up and go from house to house but at Redfin there is no buddy-ing up. You need to drive separately to the same destination over and over, which is super impersonal. This is a cost cutting measure, I suppose, due to the liability associated with carrying passengers.
Oversights
Ms. Redfin was not really involved until we already submitted an offer. If you request your Redfin agent to do anything more and it’s the busy season – forget about it. There is no supervision. You’re on your own.
She rushed on the paperwork. We had to contact her constantly. I’m counting 8-9 times there were big obvious mistake like date, our names, price, date to respond etc. These are super important things on a super important document! How can you screw up that many times and still call yourself an agent? What is Redfin’s hiring process?!
We caught all but one mistake the final time. She forgot to change the old date to the new date so when our mortgage lender saw the old date, he thought we were in a rush to close. Our lender charged us a $250 fee for rushed service that we didn’t need. Thanks a lot Ms. Redfin.
I wish Redfin was upfront about services they do provide and don’t provide. I recall one day I asked Ms. Redfin, “Okay, so what service do you guys have and what are we supposed to do?What is a reasonable thing to request of Redfin compare to a traditional agent?”
Her: “Uhh…“
She didn’t even know.
What.
The.
Hello Kitty.
Negotiation
Redfin agents who not work off a percentage of the home sale. I thought this concept was brilliant! My incentive was for there to be no incentive in real estate negotiations! Except…it was like Ms. Redfin was afraid of giving me an actual recommendation. She kept saying “what do you think?” and “it’s up to you.” So at that point I’m thinking…well what am I hiring her for?How about giving me some more recent neighborhood comps? How about scoping the sellers and seller’s agent on the situation? Does Redfin offer that or is that part of the cost cutting?
First time home buyers will probably lose more money with Redfin.
This is a HUGE purchase and negotiations are critical. Fortunately for me, I did my own research and I was also able to feel confidence in driving the price down after stalking researching the sellers in depth. They were over leveraged and I wanted to play hard ball. I talked the price down quite a bit and the seller’s agent was very curt with us afterwards.
Had I mellowed out like Ms. Redfin, we would have had to pay almost $5,000 dollars more on the house. Our Redfin rebate was only $3,500 dollars. That could have been a $1,500 mistake going with Ms. Redfin!
Neighborhood
Our seller’s agent was spectacularly difficult. He was so passive aggressive and I learned after we closed that his industry reputation was not an earnest one. Professional integrity anyone? A traditional agent with detailed neighborhood knowledge would have known our seller agent’s reputation. A traditional agent with neighborhood experience may have advised us to be more careful around a ‘snake oil salesman’ disguised as a realtor.
Neighborhood familiarity is important and even if Redfin claims their agent specialize in that neighborhood – it doesn’t matter! Your agent won’t be there with you or even tour with you.Their support team does the paperwork and you are on your own for the rest of it.
Redfin Inspectors
I find most Washington home inspectors are generally inexperienced. In the state of Washington for you to become an inspector all you need is a contracting background and a 8 hour training course.
Yup, 8 hours to review everything you need to know about a house. I don’t think so bub. Our Redfin home inspector was nice but he missed some big things. Just like our Redfin agent, he was superficial and impersonal. He didn’t tell us that our sink plumbing was illegal installed! He noted that the roof gasket was gnawed by a rodent but not the fact that the entire gasket was incorrectly installed!
If you want to be smart about your inspection: hire a general inspector, a structural engineer, a licensed electrician, a licensed plumber and (depending on your area) pest control specialists too. These degrees of specialization will cover the most expensive oopsie-daisies.
Summary
Phew. I honestly thought I would hate writing this up but that was actually therapeutic. Gee…how I wanted my first guest post on Mustard Seed Money to be a positive piece, aw well.
In conclusion, I do not recommend Redfin because of their impersonal, touch-and-go business model. So I recommend most home buyers (especially first-time buyers) to go with a traditional realtor. It is best to establish a person who will understand your taste and provide you with a point of contact. Although I highly recommend the Redfin app – I would steer far, far away from Redfin as a real estate firm. A purchase this size is NOT something you should cost cut with an online firm like Redfin.
Thank you Mr. MSM for giving me a chance to tell my real story. I hope this is helpful to your readers who are or will be home shopping someday!
What I read here iview with skepticism. For example what you said about the home inspectors takes only 8 hours to get a license in is incorrect. After 35 plus years in the construction industry I decided to get my home inspector license. It took 120 hours of classroom instruction, 40 hours of time with the license inspector. Plus many hours time studying for the state test. I’m sorry if you had a bad home inspector and I wonder if they were actually licensed?
Mike Dalnekoff was my agent, and we stopped using RedFin all together because of our experience with him. He simply refused to return our calls/texts/emails. RedFin asked us to fill out a survey, which I did, and the reply we received from him was: “I regret that there was a communication breakdown leading to this buyer being unhappy with the service I provided.” The communication breakdown was simply that Mike REFUSED to reply, via call, email, or text. I’d say that it definitely a communication breakdown. Great way to blame the buyer. Oh, and I am living in said house now that I went through another agency.
Awesome guest post. Thanks for the honest write-up. I feel like so many bloggers only write about the good stuff so they can get all the referrals. At least you got therapy out of it 🙂 Sounds like a super stressful experience. I would have been losing my mind if they kept doing the paperwork wrong. I would keep thinking “what else are you messing up if you can’t get my name right?”
We interviewed three agents before we picked one and we walked away very happy on our first house.
Grant @ Life Prep Couple recently posted…Why I Use 5% Withdrawal for Retirement
Thanks Grant! 🙂 That’s great advice Grant! I wish we interviewed more agents. The market is so crazy in Seattle that our “first choice” agent couldn’t even fit us in, both times for both houses!
We’ve been curious about Redfin to save money on commission when we eventually sell so we appreciate your write up. Thanks!
I hope your experience selling with RedFin will be better than my experience. A good agent plays a bigger role in the experience than any RE firm.
We were going to list with Redfin the listing agent we were assigned ,pretty much said in April we’ve missed the market was asking too much and wait for next year. Went with another full service agent and got exactly what we wanted and had multiple offers as of today may 15 just shy of a month. One other item worth mentioning there was one agent from Redfin who came to the door during dinner but was scheduled for a half hour later and rude saying our Agent should have informed us that is standard practice.
We have had an extraordinary buying experience with Joe Goldian, Redfin Sr. Agent, in Cleveland, OH.
He has stayed on top of all aspects of our search and offer. Helped negotiate the inspector found issues and even offered to be at the inspection. No matter if there was a savings in commission or not, I would recommend Redfin based upon my experience.
Their app and ‘Deal Room’ in the app helps keep the closing on track for a smooth sale.
Im biased in my opinion because I’m a licensed Realtor not with Redfin. They claim to be transparent and advertise a 1% commission to seel your house. See fine print which states it doesn’t cover the cost of the buyers agent which is typically 2-2.5%. Combine that and the fact some states require at least 1.5% and you’re looking at 3.5 – 4% range. Is it really worth it considering the detailed reasoning described in the article? Stick with those that you can trust. I always suggest asking friends and family for a referral. Thats my two cents. Best of luck to all. It’s a viscous world we live in.
It’s so important to recognize the value of paying for certain services. Thanks for the warning!
Daniel Palmer @ Pennies and Dollars recently posted…You Need To Define Your Dreams
Very true Daniel!!
Oh wow! I didn’t realize Redfin offered an agent service and I’m glad I didn’t! We just bought our house last October and it was a relatively painless process partly due to the fact that our local real estate agent was very helpful!
Mrs. Adventure Rich recently posted…What’s in Our Wallet: Investing Edition
RedFin doesn’t offer agent service everywhere but they are a legitimate MLS. I’ll a bit jealous of your home buying experience. Let’s trade!
I didn’t realize how crazy things were over at Redfin. When my wife and I were Realtors, we worked for Keller Williams in Bucks County, PA. My wife was the lead agent and handled all the clients while I handled the backend and marketing. She was available to her clients almost 24/7. It drove me nuts at times, but it’s her customer that made her so successful. Eventually, she would just keep getting referrals because people enjoyed working with her so much. She’s a stay-at-home mother now (and has been for over a year) and still got a call recently.
My advice to first-time buyers is interview a few agents. At least three. Meet with them, have them show you a few houses, and then chose the one you feel understands you.
Plus, you need to quiz these people. Ask them about the market, ask about how resales are going in the area, and about how old things are like the roof or water heater. Before we were agents and we purchased our first home, my wife would quiz agents about the economy. Did they know or have an idea about interest rates … that sort of thing. Be proactive and don’t hold back.
Absolutely Dave! This is amazing advice and I 1,000% could not agree more. This purchase is too big to not be proactive! A dedicated agent is a good agent!
Dave – Great advice! We did interview 3 agents and we selected agents to interview based on the number of properties they had sold in our area in the last year. We had a list of questions we asked each agent and kind of rated the answers. Our home sale in Havertown (Dave you live near us!) went really well as a result.
I thought about trying RedFin and now I’m really glad I didn’t.
Mr. Freaky Frugal recently posted…Freaky Frugal or Stupid Frugal?
Hi. My husband died and I need to sell our house. It needs A LOT of work but there r strong points too. I lived in it for too long so need to keep fix-up investment to a minimum (money goes to mortgage). Thought about Redfin but researching has given me pause. What is the typical commision % for a traditional agent? The one i spoke with said her % is 5%. Is that high?
Peg- Commission is negotiable. Typical is usually 5-6% which covers the sellers agent & broker and the buyers agent/broker. I don’t recommend having one agent represent both sides since nice they have opposing goals & fiduciary obligations. Rather than focus on the 5-6%, focus on you 94/95% equity. A good agents marketing and negation skills can more than compensate for any commission concerns. Hope that helps. Jane Strauch, Realtor 520.388.6842
Peg, 5% is about right for a traditional broker. Redfin advertises 1.5% but that is VERY MISLEADING. The number is 3.5%-4%. Also, to save that 1.0-1.5 percentage points you give up a lot. We found that Redfin is focused on technology but has no idea about the markets. The broker we considered (and did NOT go with) really knew nothing about the houses and markets. You are smart to steer clear of Redfin as listing agent.
We had a great experience buying our first home. Our traditional realtor helped us every step of the way.
I wish she had helped us set our price range but understand why she didn’t. The bank told us $100k more than we actually could afford. Luckily we figured out on our own and bought the right amount of house.
Budget on a Stick recently posted…Allowance: The Anti-Deprivation
Great job BoaS!!! Our traditional agent didn’t ask for our budget either! She asked us what was our desired price range casually and she went auto pilot from there.
Thanks for the honest review. I’ve been debating if we ever move going one of these online routes. Especially after my experience here with our first house where I located the house (in Delaware you find the inspector and the lawyer separately so other then the tour the realtor did nothing). My second realtor was much better but was also emotionally invested as it was a family friend so I’m not sure I can consider that success. Still you’ve given me pause with this review. Thankfully I don’t plan on buying again for a while, but points to ponder.
FullTimeFinance recently posted…Important Dates and Goal Setting
Happy to hear I’m not the only one who dreads the home buying process 🙂
This is truly an amazing post and something I have been waiting for for a LONG time. Thank you so much, Mr. MSM and Lily, for making it happen!
I love how Lily was so open and honest about her thoughts of the whole process. We went with a traditional agent for our first home. I was thinking about using a Redfin agent next time for a discount. But after reading this awesome post, I’m having second thoughts about it. >.<
Ms. Frugal Asian Finance recently posted…5 Frugal Wins & 2 Frugal Fails – June 23
That was my thought too. “I know what I want, I did it before!” I do want to bring up that the *quality* of the R.E. agent plays a bigger role than the R.E. firm. Is the DC market still crazy competitive? That also effects things.
Sorry to hear that you had such a bad experience with your real estate purchases and especially your agents. I am Realtor in Canada with some knowledge of the market down south. From what I am hearing, you worked with the wrong people, to put it bluntly. Here is my two cents for your future reference:
– before hiring a real estate agent, create a list of skills that you want your agent to have and assess them based on those skills.
– meet with at least three agents and you don’t have to settle if you are not satisfied with what you see.
– if you are more knowledgeable and are required to do more research than your agent, it’s time to find one that work for you.
– if your agent is not responding in a reasonable amount of time (a couple of hours) and are not available to serve you, it’s time to switch.
– if an agent cannot draft a contract correctly, run and don’t look back.
For those that are interested to learn more about real estate, I have a few posts on my blog that can assist you.
Leo T. Ly @ isaved5k.com recently posted…Who’s The Real Leo T. Ly?
Thank you Leo. And yes you are right. I wish I can turn back time or fast forward time to read this message! We did screen a few realtors before but the market was so competitive we were being passed onto different agents because (my guess) the good agents were already being bombarded and we were not first priority.
I’m glad you wrote this, Lily. Everything I’ve read about Redfin discusses their low fees, but they didn’t discuss actual customer experience.
Have you thought about going rogue and doing everything yourself and only using a lawyer?
The Grounded Engineer recently posted…2017 mid-year goal check in
Yes!! That was my first option for both purchases!!! I contacted the same firms twice! No one had availability, I got a few kind rejections. They were swamped. Kinda our fault for starting mid summer both times…
Thanks for that review. I really like the Redfin site and always wanted to use their service to save on commission. When we bought our co-op (NYC) I considered using them but my aunt is a real estate agent and I felt some obligation to use her as she is family. You’re definitely right that someone who wasn’t prepared could lose money with a passive agent like you encountered. But when I bought, I knew the neighborhood well as we were renting in the area for a few years. I researched and did my own comps. It felt like agents only really just opened the door for us to the see the place anyway. Horrible that they messed up the paperwork. I hope you complained or left a bad Yelp review =) You don’t have to use their home inspectors right? I didn’t even know they had their own.
I did leave a bad Yelp review. I gave myself a year to cool off and if I still felt like RedFin stunk then I told myself I would write it. And here we are! You do not have to use a RedFin inspector but they highly recommended their guys (which mmm, now I don’t think is a good idea.)
Finally someone with some experience with RedFin. I have always wondered what this service was like. It always seemed more attractive to me as a seller instead of a buyer as the seller typically pays the commissions. This gives me pause to use them. Hopefully there will be a new player to disrupt the market (like Facebook did to My Space or Friendster…any one remember Friendster?).
Dads Dollars Debts recently posted…Hump Day – June 21, 2017
Lol yes I remember Friendster!
I really wanted to like RedFin, I did. I think the idea is brilliant and their app is superb. But they got some kinks to work out and it’s not the revolutionary everyone described.
We LOVED using Redfin to buy our home. I loved my agent so much I would use him to sell if he was available. There will always be bad experiences, just as I had a terrible experience with a traditional Realtor when selling our last property. As some others have said- interview and meet with your agent before hiring them. Redfin made a 10 hour away move so very easy for us! And my agent even submitted an offer for me while he was on vacation in Mexico! I’m sure they have room to improve but sounds like this experience was mostly because of a bad agent.
Excellent read! I’m rather shocked at the service you received from Redfin. Thanks for posting.
Monica recently posted…Go for Freedom with SWR – Retirement Part 3
Thanks Monica!! 🙂
I was lucky to have someone I know who is a real estate agent in selling and buying my now current home. He hooked it up with a crazy discount in terms of commission. In terms of the house, we were able to get a good price and a couple of extra modifications because the builder made mistake that benefited us 🙂
SMM recently posted…Simple Stock Comparison – KO & PEP
Aw you lucky gun!! Everyone needs a good realtor friend!
Great write up Lily! Sorry to hear you had such a poor experience with the rental house purchase. I’ve been fortunate to find a realtor who has handled 5 of my home purchase/selling transactions.
Thanks for sharing your story and for the heads up on the Redfin app too!
Thanks Amy! The RedFin app is definitely the highlight of RedFin 🙂
Redfin sounds bare bones and doesn’t seem to do much of what a traditional agent does, but that sorta makes sense. You can take out the middle man but not what he does.
I have had bad experiences with traditional agents (lazy, incompetent, greedy, self-serving), but I’ve also had some good experiences with others. Their fees are high but good ones are worth it – the real problem is when you pay the high fee and get Redfin-like service.
Thanks for the information!
Paul recently posted…Cherish the Moment
RedFin is very bared bones and for a $3500 refund, it’s not worth it IMO – and I’m frugal! The quality of the agent plays a huge role so everybody needs to shop around!
Amen, sister! Being a GOOD Realtor is hard work. You not only have to know your clients and the area but be available to them at the drop of a hat. When buyers see something come available they want to see it NOW!! I did real estate for 8ish years and my main focus was first time buyers. I love the enthusiasm of first timers but there is a lot of educating that goes into it. Good thing you guys had the traditional Realtor first!! I always wondered how Redfin worked from the agent side. Thanks for giving me the low down!!
Miss Mazuma recently posted…An Aha Moment… Reverse Engineering FI
Yes!!! SO much this! Being a realtor is a lot more work that it seems. You have 1000 small tasks that need strong attention to detail. You have to deal with all kinds of people (that have no obligation to buy through you!) You have to wear so many “hats” as a realtor. First timers should definitely not go with RedFin. It’s going to be a bum ride!
Thanks for this post! Now I know not to use Redfin =) I think, like anything, it’s important to align incentives. The person you’re working with needs to have something to “gain” by getting you the best deal. And something to “lose” if they cut corners. Sounds depressing, but it’s just how the world works =( And with something as big as a home purchase, where it’s so easy to lose many many thousands of dollars, all at one go, the stakes are fairly high!
The stakes are crazy. You can get a 30 day guarantee on a set of underpants from Amazon but you can’t with RE that cost 30,000 times that. Eeeesh, what a world!
My wife and I bought our home (Bay Area) through Redfin, and were fortunate enough to have a much better experience than you did. I’m sorry the process didn’t work well in your case, and it sounds like Redfin needs to ensure their agents are more responsive and available. With all that said, I wouldn’t write off Redfin, because like I said, I can personally attest to having had an excellent, responsive agent who did a great job helping us negotiate a fair price.
I think it was the quality of my agent. A friend of ours used RedFin and had a great experience but when we contacted RedFin as follow up, that agent had already left RedFin to start his own firm! That brings me back to the talent pool issue. I’m so glad you have a better experience! I wouldn’t wish ours on anyone!
Wow I would not have been able to keep my cool and use Redfin at all. Seriously would have lost it.
Our traditional agent was amazing. After we put an offer on a house, she could tell we were settling. She made us go look at one more house. We fell in love with the second house and we were able to cancel our first offer to get the house we really wanted. All something it doesn’t sound like Redfin would do.
I like the idea of disrupting the real estate industry and their commission structure. Can lead to some shady practices. Overall I still prefer paying for the help and value of a great Realtor.
Thanks for sharing this story!
Save Splurge Deny Debt – Cameron recently posted…Minimalism-ish Update #1: Four Big Challenges and Small Wins
Thanks Cameron! Great to hear your experience and yes I think good traditional agents just has more experience, “it’s like I’ve been doing this for so long I just know” kinda thing 🙂
I definitely wouldn’t have been able to handle the situation you had to deal with. I would have high tailed it after the first set of mistakes.
I have to say our recent home purchase using a traditional agent went well and would take the same road again in the future.
Sometimes in our frugal ways we need to step back and see if there is true value in paying for certain services.
FIbythecommonguy recently posted…Dollars and cents behind the move
Yes exactly! I think this was one case where being frugal may have backfired.
Thanks for sharing this info on Redfin. For the vast majority of people a house will be the largest purchase they ever make. Unless you are a skilled real estate investor, you are better off with a traditional real estate agent. As you said, that seems like prudent advice for a first time home buyer because it can be overwhelming.
Dave recently posted…Knoebels Amusement Resort
Thank you Dave! I wholeheartedly agree!
Thanks for the advice! I was actually considering using redfin, but your article has made me think twice.
I wanted to stress that the individual agent will be much more important than the firm. But having a good resource and talent pool to choose from is also important. I would recommend interviewing a bunch of agents and find the “Cinderella” for your family. If I could do it again, that’s what I would do. It sets the tone for the rest of buying experience!
A review that ends with a “no recommend?” You rarely see that, but it really ups your credibility. Nice guest post! Also, with your $100k/yr savings rate, you are well on your way!
JT@JustMakingCents recently posted…Your Financial Beach Body: Stop Getting Sand Kicked in Your Financial Face
Lol thanks JT, you are an observant cookie aren’t ya :D! I asked MSM if it was OK I post a not-so-great (honest) review as a guest post (I didn’t want him caught in between) but Mr. MSM had no qualms at all. I’m so glad I could tell my side of the story!
Very well written! I agree with JT, it’s rare to see a post where the author doesn’t recommend a service – thanks for the honesty. I’ll be a first time home buyer in the next year or two, so I’m glad I read this before going through the hassle of a service like Redfin. Also, $100,000 a year is an amazing savings amount! Probably the highest I’ve seen. Keep it up, Lily!
Matt @ Profitable Matters recently posted…Sticking To Your Principles When It Means Sticking Out
Thank you Matt!! I think the other commenters here provided great advice which is to choose your agent thoroughly and carefully because that will set the tone for the rest of the experience. I was too scared to reject anyone (that was my mistake) and I wish now I had more of a backbone about it.
That sounds like a terrible experience Lily when home buying isn’t exactly stress free in the first place. We’ve only ever gone with the traditional options and had no complaints. Thanks for the warning that it’s worth having a good hard think about whether new players in the market are actually worth it. I hope any future purchases you make go smoothly.
Eliza recently posted…Essential Guide to Better Money Habits
Thank you Eliza!!! Trust me girl, no more for a while! I never liked house shopping and I don’t think I’ll like home selling.
Interesting. I’ve been considering Redfin or the like for a home sale…
Finances with Purpose recently posted…Financial Update (June 2017): Inching Towards Success…
Awful, awful, awful, awful! So sorry to hear your terrible experience. I’m actually a Realtor myself and I’ll tell you, not many “traditional” agents are much better. I’m constantly baffled at the customer service of other people. I get clients who choose me simply based on NOT having a bad review.
A good agent is a rate commodity these days. Some tips to find a good one: check out their resources. Ask them who they use for an inspector, contractor, handyman, etc. If they don’t know their resources off the top of their head, it means they don’t “fix” problems. If I’m going to earn a 3% commission you can darn sure be believed I won’t call you with a problem unless I have a solution.
Ask them about the local area. I’ll be honest, I don’t know every neighborhood (there are no less than a bajillion in my neck of the woods). However, I can tell you the average price per square foot of most areas near me. They gives you a basic “rough-shod” idea for any given area. They should also be able to tell you “standard” upgrades for a given area. It’s MLS research that they should be conducting.
Hope that helps for future ventures! But at least you have a house now, right?
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Wow, this post was such an eye-opener! My frugal self was set on using Redfin because #allthesavings but yikes! Maybe we’re better off using a traditional realtor who has their shit together. Like you mentioned, this is a HUGE purchase, so the possibility of spending a bit more for the realtor’s help might be worth it in the long run.
Thanks for the story. Sounds more like an Agent issue than a Redfin issue. Like any brokerage, there are good and bad agents. Redfin agents are no different.
Thanks for sharing Geoff!!! I had a similar thought…
Exactly this. I bought through Redfin over the summer in a HOT market. My agent was phenomenal and we were very pleased!
Great honest post! The way I look at is : if you devalue yourself so much that you actually have to pay people to use your service, how great can it be?
As someone who had been a “Traditional” Realtor for 16 yrs and went to Redfin 4 months ago I can tell you that you had the wrong Realtor not the wrong compny. Redfin is more passionate and caring then any other company I’ve been with (3others). For 16 yrs all the companies I worked for had classes only on how to get business. How to manipulate the consumer into thinking you care about them( pop by their house with a cheap gift, call them often and pretend you care then ask for referrals,have a party for clients that those clients unwittingly paid for etc…). Redfins classes are “ what can you do for the consumer. “. Yes if your agent is busy an associate agent will tour homes with you, but thats so you dont miss out on a home if they already have appointments. A good agent is a busy agent. Also, very few traditinal agents drive with anyone in their car these days. Just some input from someone whose worked both sides and can tell you Redfin cares about the consumer whereas the majority could care less. Im sorry your experience wasnt good but I can tell you that it wasnt Redfin but the Realtor.
Thanks for sharing Michelle!!! It’s great hearing an insider perspective 🙂
Thank you for writing this. I am a Seattle Realtor and have been on the other side of RF agents. Some of them have been frantic. They have been very nice but I believe them to be overworked. An ex-agent told me she always had 30 contracts at once. That’s why they can’t actually see the property they are writing on. Which I see as a very important piece to any negotiation.
People are in love with the app (rightly so it cost RF a ton of venture capital ) and the rebate (which can be short sighted). I save my clients more money with my knowledge and negotiations than the small rebate. My career is an honor and a calling. It’s not an hourly job. I help them find the home where they will raise their family and make lifetime memories. It is a step towards personal and financial stability. It’s not an job title to be taking lightly and collect a weekly paycheck from.
Thanks for sharing Kim!!! You bring up a great perspective and it’s clear you are passionate about helping your clients. If I am ever in the Seattle area I will definitely look you up 🙂
Great article. I am in the real estate business and I have seen REDFIN rapidly advance this year with noticeable marketshare. But their billboards advertising 1% listing fee really got my attention; apparently for sellers as well. REDFIN, Zillow and others have created applications that bring consumers much of the information that real estate agents traditionally provided. REDFIN’s agents often work like UBER drivers, where they take appointments on a mobile app for a flat fee. So you will be seeing different agents when you work with REDFIN. REDFIN absolutely has shortcomings, especially for the first time buyers, who have lots of questions that a full service agent can better answer. I suspect their services will improve over time and the whole industry will require less real estate agents within the next ten years. The question is will REDFIN chalk up too many bad reviews because of the major flaw in their system – you get less quality and personal representation. Buying a home is the largest purchase for most of us. A good agent provides important services. But by having multiple agents showing you properties, you lose the guidance that a personal agent has. My prediction: REDFIN continues to grow and more than one brokerage emerges, copying their model.
I tried using a redfin agent once. It was a few years ago and they didn’t have touring agents – the agent who was assigned to me was who showed up for our first showings. I had picked all the houses – he had no insight. I had four houses on the list. He got lost going to three of them. I think that aligns with what MSM has to say about their lack of neighborhood knowledge. At one point when we were in a house, he actually opened a window and lit up a cigarette. No joke!
That’s disgusting. I think I would have told them to take a hike if they smoked in someone else’s home. That’s awful behavior.
I am a broker with Coldwell Banker for 33 years and it was so wonderful that you shared your experience. We have been discussing this for a while and recently had one of my associated interview Redfin. Today the complications of the sale are only the beginning and wait till the home inspections come in. Then the real trouble starts for both the buyers and the sellers. Experience speaks volumes in this volatile market. The buyers want everything fixed on the inspection and it really takes a lot of experience to get this all done not 5 different people on a hourly wage. It is hard and stressful for all parties involved and having an experienced agent says volumes in todays market and it is not an easy job.
Thanks for sharing your history Sharron!!! Real estate appears to be easy at times but there is a ton of work that goes into it 🙂
Thanks for sharing this experience. I have a friend who owns multiple homes and she also steered me away from RedFin. In regards to the commission rebate, I don’t know about where you live but in California it’s quite common for your agent to split their commission with you (if they don’t then you should get another agent).
Wow I hadn’t previously heard that they share commission. That sounds super intriguing 🙂
Ok I really don’t see a point in buying a home with a Redfin agent. The seller pays all commission to the buyers agent and there listing agent. So save your time when purchasing a home a use a solid realtor I’m sure everyone knows one since it’s so saturated. As to selling your home with a Redfin agent I think it’s a a brilliant idea because of low commission and like I stated seller pays all commission so that will save you thousands. As for buying a property I really don’t see the point.
Interesting perspective Chris!!! That makes a ton of sense if you can find a Redfin agent that you like. Sounds like it’s a potential win/win 🙂
I was purchasing a house in 2015 with a Redfin agent.
She pushed me to remove all contingencies when I had no idea what I was signing. After the deal fell apart she ran away and nobody from Redfin ever answered me.
After 3 years I still haven’t received my deposit of 27k.
After spending a lot of times I found out Redfin does that with a lot of customers. I’m collecting emails so we can file an action lawsuit. If this happened to you please email me at redfinlawsuit@gmail.com
Whatever. I saved almost 12k going with Redfin to sell my house. I personally believe anyone is crazy not to use Redfin on the sell side. What, you don’t like extra money in your pocket? Please people, give me a break. Selling a home is not that hard. It all depends on ho wyou price it. If you price it poorly you will have bad results. If you price it properly, it will sell. Of course location is a factor as well. People, the Redfin rebate is the real deal. Agents aren’t useful nowadays. Times have changed and the traditional agent is being left in the dust very quickly by online firms. Don’t be fooled. Go with the money in your pocket.
I think the delayed MLS listing details are very annoying to the industry as a whole. As an agent I can’t even begin to tell you how many times I have had buyers tell me they want to look at listing they saw on Redfin, Zillow or some other secondary MLS only to find out that the property is sold, under contract or off the market all together.
Secondary MLS services should be required by law to state that they are just that when purchasing more then a certian percentage of listings from another primary listing sources. Primary MLS services require agents to update in real time and that being said are much more accurate and cut down on wasting agents as well as their customer’s time.
Not all agents are equal at any brokerage. Stereotyping all of Redfin by an experience with one agent is unfair. It’s like saying all McDonalds are terrible because one franchise served spoiled burger meat. The best thing a consumer can do is interview agents and find out what to expect. Ask the agent about their qualifications, their process, and look at reviews to find the agent that’s right for you. Redfin posts every review from every customer and I would be willing to bet that another agent doesn’t post ALL reviews, they hand select the best few.
Real estate is being disrupted and changing rapidly with all of the money being invested in the industry. Traditional models probably wont survive the next 5 to 10 years and there will be many startups that crash and burn but there will also be companies that are more consumer focused and put the customer experience above all else. When’s the last time you used a travel agent or called a taxi cab company? If you are looking at real estate and need to have your hand held then find an agent that will do it. If you want a travel agent to tell you where to vacation then use a traditional agent. You end up paying more for the same experience.
Excellent! To post a article about a one time experience of a bad agent that was on his way out of the company is not a fair article. Majority of traditional agents get paid $10k-20k to open doors to homes you found on Redfin and put your name on a contract. We are more informed than most traditional agents.
They weren’t knocking all of redfin because of a single agent. Did you read the article? They were knocking the structure of Redfin with the multiple assistants and never getting to work with the main agent they selected. They were also annoyed at the lack of knowledge pertaining to specific areas. Redfin does not connect with individual clients worth a crap. It’s all about quantity vs quality to them. Just heard them through like cattle. On the last house I sold every redfin agent was totally clueless if their “clients” had questions or when they would ever talk to them again. One guy said if they called it would be funnelled through the assistants and he wouldn’t even know. Patheric… Redfin is just glorified door openers.
I was told by a friend about selling our house through Redfin because they only take a small percentage. I have been going through many review pages of Redfin and all aren’t very positive. Thank you for this article. I enjoyed reading it. I can feel how stressful you were through your words. Buying/Selling homes is a stressful time and we just don’t need more of it! I think we’ll just stick to our current agent instead of going through Redfin.
I keep hearing home buyers refer to their expectations from agents, but they don’t seem to understand that the SELLER is paying for the service and the agent is not supposed to be representing the buyer. On a typical Seattle property, the seller will have to cough up over $40,000! If they have a normal amount of equity in their house, that means they will be paying out 20% of their equity. Who earned that equity? Did the real estate community contribute to the value of the house? Did they help prepare the house for sale? The whole basis for real estate compensation is archaic and doesn’t treat either side fairly.
We considered using Redfin to sell our house. Their roots are in technology, and it seems that their technology and app are pretty good. They failed, however, when they tried to be brokers too. (Yes, I am basing this on a data point of one but, reading reviews around the internet, I do not think I’m alone in this opinion.) The broker they sent us — someone named Kathleen Franco — did not know the market. Her pitch relied on touting the tech and, when asked market-related questions, she hemmed and hawed. Her conduct was also unprofessional. I guess this is unsurprising, given their cut-rate pricing. What broker would work for Redfin for half the pay? Answer: only the weak ones.
Beware of their pricing pitch. Their ads say “1.5%” but, in fact, the number is 3.5-4.0%. Very misleading advertising.
The bottom line: you get what you pay for. Pay less; get less. And you definitely get less with Redfin.
Hi: very well written and well thought out article. As a Realtor I have a small bone to pick with you. Maybe two. You mentioned a couple of times that the traditional t has an incentive to drive up the price because of the commission. Obviously, that is technically true. Personally, I fight hard for my buyers. I take my fiduciary responsibility to them very seriously. Most agents, in my experience do as well. The percentage on a sale is usually around 2.5% on each side. So a swing of $10k on the sell price is only going to be $250. No one would risk losing a sale, maybe losing a client and or a referral stream for $250.
The second thing is dual agency. It really doesn’t happen that often that an agency or agent will be on both sides of a transaction. It should always be disclosed (required here in NJ). If I have a buyer for a listing of mine, I tell them. When we get to the point of them considering an offer, I tell them to to tell me what they are thinking. I will hand them off for the negotiation and o an agent I trust. Once that’s all done I continue walking them through the process.
Again, nice article.
Best regards
Ben Cripps