I'm closing literally today on a house I bought through Redfin. It's my third Redfin buying experience. Redfin for buying is great. Their website makes it easy to look for properties and get alerts when properties you might like go on the market. No need to pay a realtor to do that part.
I'm still not using Redfin for selling. When you sell, you're paying for a salesman, and a salesman can make a big difference on how much you sell for, IMO. Redfin will save you 2%, so the question you have to ask yourself is: will a traditional agent make me 2% or more, compared with Redfin? I think the answer is yes, they likely can.
Indeed. When I needed to sell a house in the East Bay, the Redfin agent wanted to list the property for almost 20% less than it sold for. When I told her that I thought she was pricing it too low, she looked at me like I was crazy. The local agent that we ended up using instead (who had recently sold 3-5 houses in our same neighborhood) had a much better idea of what the house was actually worth, and also paid to stage the house--which Redfin would not have done.
We used Redfin to purchase that house, and our purchase experience was very positive, but selling the house with Redfin could have cost us a bundle. It would probably have been fine if property prices had not been rising so quickly at the time, but regardless, I am a believer in the value of staging which is a service not covered by Redfin's fees.
Yes, but it seems you've missed my main point entirely. If I had used Redfin, the house could have sold for $80-90k less than it otherwise did, whereas using the local agent cost me perhaps $5-6k more. The smaller point that I was making is that you often can't compare Redfin's fees to the local agent fees without also knowing if the local agent provides staging services, and many of them do. Granted, staging is only a couple thousand for a modest house (from what I understand), but it's something to be aware of.
I would guess that Redfin's problem is retaining talent. If an agent can make more money going off on their own, they likely will. The agent who helped us buy that house was amazing. But, guess what, he isn't at Redfin anymore. It's too bad. I love Redfin's site and want them to succeed, but perhaps they don't do enough to retain good agents (or their model financially prevents it). That's just a guess, though. Also, their agents may have to cover a larger geographic area than other agents, so it's not possible for them to be as intimately familiar with particular neighborhoods.
I'm still not using Redfin for selling. When you sell, you're paying for a salesman, and a salesman can make a big difference on how much you sell for, IMO. Redfin will save you 2%, so the question you have to ask yourself is: will a traditional agent make me 2% or more, compared with Redfin? I think the answer is yes, they likely can.