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marlin_princess
Posts: 4
Registered: ‎04-17-2011
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Is 2.5% commission for buyer's agent typical for standard sales?

I am a first time buyer and have gone back and forth about using Redfin. In the end, I finally decided to go with Redfin because of the great refund policy.

 

We reached mutual acceptance last night, and this morning I received an email from Redfin stating that my refund was much less than I had calculated (39.9% less, to be exact). When I saw the number I was stunned - I had factored that anticipated refund amount into my ability to come up with sufficient cash to close. I'm not sure how I'm going to do that now.

 

When I asked my agent to explain, she said that "Most homes in this price point do offer 3%, but the seller in this instance advertised 2.5%." This was definitely new information to me, and my agent confirmed that she had not discussed this with me at any point.

 

In general, I believe my agent is honest and would not intentionally withhold something like this - but after seeing that larger dollar figure in huge font and yellow background every day through the entire tour-offer-counter-etc. process - this seriously feels like a bait-and-switch. Yes - I saw the asterisk and knew it was an "anticipated" refund amount, based on 3%... but even at the Redfin Homebuyer's class they said 3% was standard except for bank-owned and short sales. Since this was a totally standard, straight-forward sale, it never occurred to me that this would be anything less than the typical, standard commission/refund.

 

This incident has completely shaken my trust in this whole purchase process and Redfin's value of "transparency." Has anyone else encountered a sub-3% commission on a regular home sale? If so, when in the purchase process did you learn about the lower commission / refund? Are there any other unhappy / expensive surprises I should be bracing for between now and closing?

Contributor
stannius
Posts: 29
Registered: ‎04-11-2011
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Re: Is 2.5% commission for buyer's agent typical for standard sales?

It is not Redfin that made the comission less. It is the seller. What would you have Redfin do? Eat the 1/2%?

About all you could argue is that it should have been more prominently displayed on the listing, but it's too late for that. The commission still isn't locked in yet - for instance your lender might disallow any refund.

 

Is 1/2% really going to make or break the sale for you? Are you putting only 3.5% down?

Super Contributor
LostInSeattle
Posts: 239
Registered: ‎11-02-2009
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Re: Is 2.5% commission for buyer's agent typical for standard sales?

[ Edited ]

stannius wrote:

What would you have Redfin do? Eat the 1/2%?


^This (if the situation is as described).

 

I know that the number in yellow is estimated, but it sounds like the commission difference should have been disclosed much earlier in the process. As I am using Redfin because of the commission rebate, this concerns me. Of course, there are two sides to every story and I a not doubting the OP, but I am hoping Redfin will weigh in here.

Visitor
marlin_princess
Posts: 4
Registered: ‎04-17-2011
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Re: Is 2.5% commission for buyer's agent typical for standard sales?

[ Edited ]

I'm not suggesting that Redfin set that commission, intentionally hid it from me, or now has to "eat the 1/2%". Rather, I am asking if this is a common scenario that others have experienced, and if so, when do they typically learn about the lower commission / refund.

 

The sub-standard commission rate was not listed in the public listing, nor any of the paperwork I reviewed. I thought perhaps I had missed it somewhere in the contract or forgotten my agent mentioning it, but she confirmed I had not. (Like I said, I believe she is honest.)

 

As I said in my post - I am a first time buyer. I have worked very hard to educate myself about the home-buying process, but I know there inevitably must be questions I didn't know to ask and assumptions I should have verified. This incident caught me off-guard. It feels inconsistent with all the messaging I have received from Redfin so far, so I want to know if this was a fluke sale, or something I should have somehow known to ask about.

Platinum Super Contributor
Nanomug
Posts: 10,382
Registered: ‎05-30-2009
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Re: Is 2.5% commission for buyer's agent typical for standard sales?

Did you ever click on the rebate link that explains the rebate in the yellow rebate box?

Regular Contributor
Johnny23
Posts: 97
Registered: ‎08-20-2009
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Re: Is 2.5% commission for buyer's agent typical for standard sales?

 


marlin_princess wrote:

I'm not suggesting that Redfin set that commission, intentionally hid it from me, or now has to "eat the 1/2%". Rather, I am asking if this is a common scenario that others have experienced, and if so, when do they typically learn about the lower commission / refund.

 

The sub-standard commission rate was not listed in the public listing, nor any of the paperwork I reviewed. I thought perhaps I had missed it somewhere in the contract or forgotten my agent mentioning it, but she confirmed I had not. (Like I said, I believe she is honest.)

 

As I said in my post - I am a first time buyer. I have worked very hard to educate myself about the home-buying process, but I know there inevitably must be questions I didn't know to ask and assumptions I should have verified. This incident caught me off-guard. It feels inconsistent with all the messaging I have received from Redfin so far, so I want to know if this was a fluke sale, or something I should have somehow known to ask about.


 

In my experience, when there was a non-standard arrangement of commission (1% off for both agents, etc. or that one time where the generous FSBO owner promised the buyer's agent all of $300), it was clearly listed on the MLS listing data.

 

Visitor
marlin_princess
Posts: 4
Registered: ‎04-17-2011
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Re: Is 2.5% commission for buyer's agent typical for standard sales?


Nanomug wrote:

Did you ever click on the rebate link that explains the rebate in the yellow rebate box?


Yes, I clicked on the rebate link and read the explanation in detail. The refund I anticipated was based on that explanation and the3% Buyer's Agent Commission repeatedly referenced on that page.

Gold Contributor
Venturion
Posts: 1,878
Registered: ‎12-28-2007

Re: Is 2.5% commission for buyer's agent typical for standard sales?

To answer your question, yes there are numerous other potential unhappy surprises you will face:

 

1. Lender - a bunch of inappropriate fees on the HUD-1 statement for closing

2. Seller concessions - once you find problems in the inspection, the seller will refuse to fix them

3. Final walk-through - stuff may disappear between the final walk-through and when you have the keys (at closing)

4. Showings - you think you have a ratified contract; a lazy listing agent might still show the property as active and/or show it

5. Rate extension - weird things delay closing and your lender says you have to pay $1,500 to extend your rate lock

 

(too many more to list)

 

I hate this industry.  Have a great weekend.

Contributor
stannius
Posts: 29
Registered: ‎04-11-2011
0

Re: Is 2.5% commission for buyer's agent typical for standard sales?

[ Edited ]

Personally, I plan to count the refund as gravy. It's too late for you, but if 1/2% ($1,718 in the OP's case) makes or breaks you financially, you can't afford the house.

Regular Contributor
Dooley
Posts: 113
Registered: ‎07-20-2010
0

Re: Is 2.5% commission for buyer's agent typical for standard sales?

Respectfully, I think you should take a deep breath and assume it was a oversite and nothing intentional. If your agent has done a fair job representing your interests, then your a lucky person. There are so many challenges coming your way as a buyer or seller. You need to pick your battle wisely. Otherwise, be suspect, step away from the process and find a another agent/company to work for you. I am neither a buyer or seller currently but own ALOT of property in Seattle and Eastside, Mistakes happen and I think you would serve yourself well by giving the agent the benefit of the doubt. Believe me I am no fan of agents. But when you find a good one, the relationship is like any other....it takes work. Good luck.