Redfin sweetens the deal for buyers who sign agreements
The new “Sign & Save” program offers buyers a rebate if they sign a buyer agreement with Redfin and go under contract on a home within six months.
- Redfin isn’t making buyer agreements mandatory, but the brokerage is giving buyers a financial incentive to sign one.
- A company exec said Redfin is willing to kick in a cost savings because those who sign an agreement are “serious about buying a home.”
- Other brokerages, as well as industry leaders, are becoming more vocal about the need for buyer agreements.
Redfin is testing the waters with a new program that could make buyer agreements more palatable to potential buyers.
Following last year's landmark verdict in the Sitzer/Burnett commissions trial, practices and policies around buyer agency are changing — including a move toward more consistent use of buyer agreements. While such agreements are not new, they are likely to play a larger role in the post-verdict climate.
And it appears that Redfin is trying to get ahead of any changes that might be coming. The national brokerage and home search portal announced a new program this week to incentivize buyer clients to commit to a Redfin agent.
Buyers get a rebate for signing with a Redfin agent
Dubbed "Sign & Save," the program offers clients a 0.25% rebate on the purchase price of a home if they sign a buyer agreement with their Redfin agent. The agreement must be signed before their second home tour, and the buyer must go under contract on a home within 180 days of signing the agreement. The rebate is bumped up to 0.50% on pricier homes purchased via a Redfin Premier agent.
"The concept is simple: as a Sign & Save customer you get extra savings because we know you're serious about buying a home, and we're serious about getting you into one," Jason Aleem, Redfin's senior vice president of real estate operations, said in the announcement.
Aleem also noted that the buyer agreement program pilot started back in September and is quickly expanding to other markets. Currently, the program is available in over 50 markets across the country, the announcement stated.
The initiative could lead to real savings for a buyer client, Redfin suggests. For instance, a client buying a half-million dollar home would get $1,250 at the closing table. "Redfin is putting money back in homebuyers' pockets at a time when many are struggling with high prices and mortgage rates," Aleem said of the concept.
Buyer agreements becoming more mainstream
Redfin is not the only big brokerage trying to get more buyer clients to commit early on in the process.
Chicago's Baird & Warner has been pushing its 2,500 agents to participate in buyer agreement trainings and to adopt the practice of getting buyer agreements signed up front. In an interview with Real Estate News, Baird & Warner's strategy leader Laura Ellis said that mandating buyer agreements is just a natural evolution.
"This is an industry that has not really changed much over the years, and it's time, because consumers have changed," she said in December. "On the buy side, agents can negotiate with the buyer on a flat fee, hourly rate or a la carte services."
During a virtual town hall event in November, eXp leaders also said they would be sending out buyer agreements to its agents that month, though they would not require agents to use them.
A move toward mandatory agreements?
The use of buyer agreements has been promoted by many in the industry who say the agreements not only give agents some reassurance that a client will stick with them through their homebuying process, but they also benefit consumers by providing transparency about compensation and the services being offered.
Last July, T3 Sixty published an open letter to the industry urging leaders to get ahead of the curve on buyer agreements. (Note: T3 Sixty and Real Estate News share a founder, Stefan Swanepoel.)
And in January, industry veteran and Collabra CEO Russ Cofano made a case for mandating buyer agreements, noting that a new law in Washington State does just that.
NAR has also indicated support for buyer agreements: "Buyer representation agreements are a win-win proposition for both real estate professionals and consumers," Deanne Rymarowicz, associate counsel at NAR said in a blog post published on the organization's site last May.