Technology-based discount brokerage Redfin is experimenting with reduced commission refunds to buyers, and has announced plans to follow up on a trial run conducted in part of Los Angeles during the first quarter, with smaller refunds in the entire Boston market starting this fall.

Redfin, which offers commission rebates of up to 50 percent in other markets, is scaling the rebate back to a maximum of 33 percent in Boston on purchases closed after Oct. 1, CEO Glenn Kelman said in a blog post.

"Big news! Redfin Boston is upgrading our service," Kelman wrote. "Now, whenever you sign up to tour a home or meet an agent, the lead agent who negotiates your deal will also be the one who meets you on the first tour, sees the home and comes to the closing table."

Technology-based discount brokerage Redfin is experimenting with reduced commission refunds to buyers, and has announced plans to follow up on a trial run conducted in part of Los Angeles during the first quarter, with smaller refunds in the entire Boston market starting this fall.

Redfin, which offers commission rebates of up to 50 percent in other markets, is scaling the rebate back to a maximum of 33 percent in Boston on purchases closed after Oct. 1, CEO Glenn Kelman said in a blog post.

"Big news! Redfin Boston is upgrading our service," Kelman wrote. "Now, whenever you sign up to tour a home or meet an agent, the lead agent who negotiates your deal will also be the one who meets you on the first tour, sees the home and comes to the closing table."

Redfin typically employs "field agents," who do not represent clients in negotiations, to conduct home tours. In 2008, Redfin reduced its refunds to buyers from 66 percent to 50 percent, as part of a new cost structuring that included free home tours. Before that, Redfin had provided two agent-led home tours at no cost, and charged $250 for additional tours.

In most markets today, Redfin offers buyers commission refunds of up to 50 percent, but only after collecting a $6,000 minimum fee. So while a homebuyer closing on a $500,000 home with a 2.5 percent commission paid to the buyer’s agent would receive a rebate of $6,250, the buyer of a $250,000 home would receive $250.

Redfin typically won’t represent buyers shopping for homes priced under $200,000, because the commission on the sale wouldn’t cover the brokerage’s minimum fee. Instead, it will refer buyers to Redfin partner agents who have agreed to refund 15 percent of their commission above a minimum of $2,500.

Kelman told GeekWire that the reduced commission rebates in Boston are "an experiment" in Redfin’s smallest mature market, and that the company has no immediate plans to roll the changes out elsewhere.

ZipRealty is conducting its own experiment with commission refunds. On Jan. 31, ZipRealty stopped offering its standard 20 percent commission rebate to buyers in Austin, Texas; Raleigh-Durham, N.C.; Richmond, Va.; and Vancouver, Wash. ZipRealty CEO Lanny Baker has said the brokerage is instead "promoting the experience, skill and connectivity of the agents," in those markets.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×