Mortgages

[geekoh]

As a new home buyer, I just want to make sure everyone is very much aware that the Redfin "refund" isn't really.

Now, the site has all sorts of disclaimers about "with lenders approval" and the like, when we started our process back in September none of those where there.

Bottom line is this, if you are doing a VA, FHA or HUD loan, then you probably won't be able to get the refund.  It only works on a standard loan, and even then only with some lenders.  Unless you are 100% sure that you are going to get the refund, then don't use the Redfin site to find your agents, find them on their personal sites so they don't lose the commission.  

We did close the end of February, and we are VERY PLEASED with our house and our agent, they were the most helpful people in the world, but because we went through the REDFIN site, they lost 30% of their commission, and we got nothing - the REDFIN corporate office kept it all.

Yes, this is a form of "bait and switch" and it really hurts the local agent - who is the one doing all of the work.  My suggestion is NOT to use the REDFIN site to contact an agent unless you are committed to a 20% + down standard mortgage.  

No, I am not an agent, or a representative, or anything other than a buyer that is more than a little put out by the way the REDFIN corporate office has cheated us and our wonderful agents.

[Dag44]

I'm kind of curious as to why Redfin hasn't responded to this.

[JimR]

Perhps they didn't address it because it's been addressed before?

http://forums.redfin.com/t5/Buying-Your-Home/VA-Loans-and-Redfin/td-p/133014

[Nanomug]

The information about the refund has been available many places in the forums including posts and under  the "buying" tab. From what I hear the refund/rebate works in most situations.  Every time I've looked at the buying information in the last three years the disclaimer "subject to lender approval" is included.

It comes as a surprise when buying doesn't work out as planned due to how rebates work. Over the years I've learned to disclose everything up front to my lender even the stuff that doesn't seem a biggy.  What they consider an issue may not be what I consider an issue. 

[Cheryl]

Hello Geekoh,

Thank you for taking the time to let us know your experience with regard to the rebate on your closed transaction with a Redfin partner agent.  We are really sorry to hear that you didn’t receive your credit.  If you want to discuss the details of your personal situation, please feel free to follow-up with me Cheryl(dot)McLaine(@)Redfin(dot)com. 

In regards to a couple other items from your post, I wanted to point out that the Redfin rebate is always subject to lender guidelines, unless the transaction is a cash purchase http://www.redfin.com/buy-a-home/refund

We’ve refunded over $85 million in commissions (http://www.redfin.com/about/press/releases/redfin-raises-15-million-round) and we take situations where a customer doesn’t receive a rebate when one is due very seriously.  Although it is true that FHA and VA loans have stricter guidelines, Redfin agents and our partner agents are generally able to offer a credit towards closing costs with little problem, unless the buyer is already receiving large concessions from the lender and/or the seller in the form of closing costs.  The key is that every agent needs  to work pro-actively with the settlement agent (either an escrow officer or an attorney depending on the state), and lender to ensure the rebate is reflected on the HUD-1 settlement statement and complies with all of the lenders guidelines.  It sounds like in your case, we either dropped the ball in making sure that communication was seamless OR the Redfin rebate was prohibited by your lender and that was never communicated to you.  In either case, our agents needed to perform better.  We’ll be following up with your agent to determine exactly what happened and we’ll take appropriate action from there.

We are happy, and feel very fortunate, to hear that you are still pleased with the service you received and that overall your experience was a good one.  If there’s anything else we can do to help, please don’t hesitate to be in touch. 

Best,

Cheryl

[LeonardVice]

Thanks for the recap. I think this could also serve as a good heads up for those who had such experience. I had no other experience in this case yet but at least users on Redfin should know and really understand this.

Thanks,

[MassLoanOfficer]

Hey guys,

I'm a lender, and I successfully apply the Redfin credit to FHA, VA, Jumbo, and conventional financing. The key is to have it established, to let your lender know BEFORE underwriting so that it can appear on your paperwork, and in my area, to have it written into the purchase and sale as a bona fide credit for certain products.

That said, if your lender does not permit this credit, I'm not sure what Redfin could do about that . . . if they offer you the credit, and you lose your financing because the lender doesnt allow for it . . . what purpose would that serve? I'm not sure one can blame redfin for this, as frustrating as it may have been - I'm sure they would have happily offered you the credit, only to have your purchase fall apart (assuming you needed the financing, and you chose the bank that would finance you).

Lenders (and more specifically appraisers that are used by the lenders but do NOT work for the lenders) are concerned (rightfully) about any money changing hands "under the table" or outside of the transaction. Credits that do not appear in the appraisal, documentation, and on the final settlement statement can skew values in an area, suggesting that purchase prices may have been engineered around details that were not disclosed. While this may be a bit of a stretch for a real estate credit, the wisdom is applied universally - this is the dragnet that drives some lenders to avoid the credit entirely.

If your credit is fully documented and above board, you shouldnt have any trouble. No client with whom I have worked has lost the credit at all.

Apologies for your situation - I'm sure that discussing it with redfin might help, and hope you contacted them.

[MichelleRisser]

This is a sensitive issue.  Being a Redfin Partner Agent, I can tell you that everyone I have worked with at the corporate level at Redfin takes their company's roles and responsibilities very seriously.  They go out of their way to make sure agents understand what is required by the lenders and how important that it is disclose this rebate ASAP in the transaction so it can be structured accordingly.

What you may not understand is that there are Federal and State lending laws and real estate laws that must be complied...and every state is different...and every lender is different.  The lenders also have "caps" on the amounts that can be credited to the buyer.  Even in a non-Redfin type of transaction, whenever any type of credit, commission or otherwise, is attempted it must be approved by all parties.  It is very important to pick your loan officer carefully and make sure they know how to structure it so it is not a problem.

I'm sorry in your case it did not work out successfully, but for the most part Redfin rebate does work. 

Michelle Risser, Realtor - Broker Associate

Redfin Partner Agent

Realty One Group