Buying a home in Colorado Springs

Buying or selling a home online sounds like the way of the future. We tend to do most things online these days, from banking online to having the ability to order something and have it delivered hours later. E-commerce is a mammoth industry, and it is only growing. Choosing an e-commerce real estate agency like Redfin might not be in your best interest when buying or selling your Colorado Springs home. Here’s why you should not use Redfin to buy or sell a home. 

What is Redfin?

Based in Seattle, Redfin emerged onto the scene in the mid-2000s, but only became public in 2017. It’s considered an online real estate agency, and it is a discount brokerage. This means that they charge a 1 to 1.5% listing fee and much lower commissions for those purchasing through the site. It provides online tools to assist buyers and sellers in Colorado Springs to be able to DIY their real estate experience. 

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How does Redfin make money?

What is redfin

The discounted listing fee that Redfin charges for sellers makes up the bulk of their revenue. If an agent does not represent the buyer, the company charges another 1% when the house sells. This percentage can end up being $4,000 to $5,000 depending on the house price and area. There are additional fees during the process that also contributes to Redfin’s revenue, including licensing, settlement services, and marketing fees. 

When a Redfin agent closes a sale, they will be paid a salary plus a bonus. The listing agents don’t make any commissions. 

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What’s the difference between a traditional realtor and Redfin?

Using a realtor to buy your home in Colorado Springs

A clear difference between using Redfin versus a traditional realtor in Colorado Springs is the customer experience. When you hire a realtor, they’re yours to be partnered with. The personal touch of a realtor can’t be beat. You will have many conversations about your wants and needs, and they will be dedicated to the process and help you every step of the way. This just isn’t possible to achieve using a website. 

While Redfin does retain full-service realtors on staff, they’re typically difficult to get a hold of, and you will likely never deal with the same realtor twice. This can be frustrating to have to explain your situation over and over to every new realtor you meet. Once you meet with your local realtor, you won’t need to do that. 

A traditional realtor is paid strictly by the commission, by selling your home or helping you buy a home. This is very different than a Redfin realtor. Their realtors are paid a salary and a bonus if they manage to close the sale. A traditional realtor will likely be more motivated to sell your home because the reward is higher, and their entire income depends on it. 

When you are dealing with a real person, you have some flexibility with communication and contracts. You can work to negotiate a contract that benefits both parties. When you choose Redfin, you have to accept their standard practices for everything. There is no wiggle room when it comes to marketing, contracts, or processes that they have in place. 

using redfin to buy or sell a home in Colorado Springs

Part of the reality of dealing with a discount brokerage is that every realtor will likely have more clients than they can handle. Past Redfin clients have noted that it’s challenging to get a hold of their agent, and it was a very impersonal process. This might sound okay for some, but for most, they hope their realtor is going to be part of the process. If you have questions, you want to be able to reach your realtor. Understandably, they have more than one client, and you won’t be their only priority, but these agents are overloaded. 

Often, discount brokerages attract newer or inexperienced agents. This could be a problem for you if you’re looking for a certain level of expertise. There’s nothing wrong with hiring a new agent because everyone has to start somewhere. Still, if you’re set on hiring someone who has proven results and a track record that speaks for itself, you may not find that on Redfin. This also means that there are some perks that only a seasoned professional can add that you can’t get through a website. From marketing tips and advice to having their own network of people they can rely on, Redfin is a much more cut and dry experience. 

While you may save some money with Redfin, you have to do most of the work on your own with little support. Why should you navigate the biggest purchase of your life alone? This is one of those situations where you get what you pay for. Let the professionals take care of negotiations, setting up showings, and the hard work. 

A neighborhood expert will also have a lot of information about the areas you want to live in. If you want to know the best schools, the best parks, or information about the best restaurants nearby, they will probably know all those things, or they can find it for you. Redfin won’t do that for you. 

Why should you hire a traditional realtor?

Buying a home in Colorado Springs

Redfin is a classic example of ‘you get what you pay for.’ With their lower price tag comes lower value. A conventional realtor will provide you with the opposite experience that a company like Redfin will maintain.

A traditional realtor that is there for you every step of the way will be your best resource. Spending the extra money when your investment is returned ten-fold is always smart. An online brokerage where you don’t even deal with the same realtor twice doesn’t sound like it could possibly be a cohesive experience.

A professional who has been around a while will know the best way to get your home sold fast. They also know to act with urgency when you find a home that you love and are interested in, and they’ve likely seen every possible situation unfold and have a solution. They will be able to maximize your home’s exposure to the Colorado Springs market, give you tips on how to stage your home for the best results, and will be able to help you every step of the way. At Redfin, everything will be an air-tight process, with little room for wiggle. Your home will be promoted to the same audience, it will have the same advertising space as everyone else, and there will be no differentiation.

Reviews online about Redfin are pretty clear that past users don’t recommend their services. The lack of involvement and follow up from the Redfin team are deal breakers for most people, and they can lead to confusion, frustration, and added unnecessary stress. Buying or selling a home in Colorado Springs can be filled with both excitement and anxiety, so keeping the process streamlined and as informed as possible is critical. Meeting a different agent every time you need something can be difficult as well. 

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Steering clear of Redfin

Buying a home in Colorado Springs

Buying or selling a home in Colorado Springs is a big deal, and you want to have faith in the realtor that you’re hiring. You will cultivate a relationship with this person, and they will be motivated to support you through one of the most significant purchases you’ll ever make. While Redfin may cost a little less, or sound more convenient, it would be a stressful route to take. You will not receive the same quality through a discount brokerage like Redfin. A traditional realtor with a great attitude is so valuable that the e-commerce industry will never replace them. 

Sources: 

https://tspmortgage.com/pros-cons-discount-real-estate-brokerages/

https://wallethacks.com/buying-a-home-with-redfin-vs-full-service-agent/

https://listwithclever.com/real-estate-blog/how-does-redfin-make-money-an-in-depth-guide/

https://mustardseedmoney.com/redfin-vs-traditional-agent/ 

https://listwithclever.com/real-estate-blog/redfin-agent-vs-realtor/

https://en.wikipedia.org/wiki/Redfin

https://www.nytimes.com/2019/05/08/business/redfin-online-real-estate.html