From James Kimmons,
Your Guide to Real Estate Business.
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May 17 2007

Left - According to the 60 Minutes episode, Redfin charges a flat $3000 fee to list a home and handle the transaction through closing for the seller.

Right - NAR says: "NAR supports all business models and favors none. Our 1.3 million members include REALTORS® who work on a full-service basis, as well as those who consider themselves to be limited service, fee-for-service, minimum service, and discounters. We think it's great that consumers have a choice today."

The Middle - might think that too much growth in this flat fee model might threaten the huge growth in the numbers of real estate agents. This in turn could result in reduced dues revenue and lobbying clout for NAR. However, using the internet to its full potential, it might be quite possible that some sellers can be served very well for a $3000 flat fee, but far from all of them.

Left - Redfin's model rebates the buyer 2% of a 3% buyer side commission coop, stating that their buyers don't need an agent, thus leaving money on the table that they should get.

The Middle - Buyers want to see the home, which Redfin advises them to do through open houses or the listing agent. Many times the listing agent is roped into this duty. Perhaps Redfin can do their job for 1%, but the seller might want to retain the other 2% to further compensate the listing agent for showings or just save money themselves. In touting fairness to the customer, Redfin seems to think that the seller giving the buyer money is fair to all.

Brokers and agents are constantly trained on their duties to the client, disclosures, bringing material facts to their clients' knowledge, etc. If the buyer decides to go it alone, they might do quite well, but what if there's a problem because they missed something? Possibly the seller might wish that they had held back that rebated amount as a buffer for attorney fees later.