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  • Difference Between Agents and Brokers in Real Estate, Explained

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    What is the difference between a real estate agent and a broker? A real estate agent is licensed to represent buyers and sellers, but they must work under a supervising broker. A real estate broker has completed advanced education and licensing requirements, allowing them to work independently, manage their own firm, and hire agents. In this Redfin real estate article, we’ll explore the differences so that you can make an informed decision as you look to sell your home in Salt Lake City, or buy in Evanston. 

    What is a real estate agent?

    A real estate agent is a professional who has passed a state-mandated course and licensing exam. This license permits them to assist clients with buying and selling property. However, this basic license requires that the agent affiliate and work under a licensed broker.

     

    Their core responsibilities typically include:

    • Showing you homes.
    • Handling market research and comparative sales data.
    • Negotiating on your behalf.
    • Preparing and submitting official paperwork, such as offers and counteroffers.

    Agents are the day-to-day contact and work to ensure your transaction is smooth and successful.

    Types of real estate agents:

    Real estate agents typically specialise in specific roles or client needs. Understanding the different types of agents can help buyers and sellers choose the right professional for their situation.

     

    • Buyer’s agent: They help clients search for properties, schedule showings, make competitive offers, and negotiate contract terms. Buyer’s agents are legally obligated to act in the buyer’s best interest throughout the transaction.
    • Seller’s agent (Listing Agent): Their responsibilities include pricing the home, marketing it to potential buyers, coordinating showings, and negotiating offers. Listing agents aim to secure the best possible price and terms for the seller.
    • Dual agent: A dual agent represents both the buyer and the seller in the same transaction. Because the agent must remain neutral, they cannot advocate fully for either party. Dual agency is legal in some states but restricted or prohibited in others due to potential conflicts of interest.

    What is a real estate broker?

    A real estate broker is an agent who has further education and practical experience and has passed a separate, more rigorous broker’s licensing exam. This advanced license is essential for anyone who wants to open their own brokerage firm or work without a supervising principal.

     

    Because a broker’s license indicates a higher level of training and expertise, the broker has more capabilities:

    • Supervision: They are legally responsible for the actions and transactions of all the agents working under them.
    • Independence: They can operate their own brokerage or real estate office.
    • Advanced knowledge: Their additional training includes legal and ethical requirements for managing a real estate business.

    All real estate transactions are legally processed through a broker, whether the client is working directly with a broker or one of their agents.

    Types of real estate brokers:

    Real estate brokers have additional licensing and responsibilities beyond those of agents. Some brokers work independently, while others oversee teams of agents.

    Managing broker: A managing broker oversees the daily operations of a real estate office. They are responsible for supervising agents, ensuring legal compliance, handling contracts, and resolving disputes. Managing brokers may also recruit and train new agents.

    Principal broker: The principal broker is legally responsible for all real estate activity conducted under a brokerage. This includes transactions, escrow handling, and adherence to state laws. Every real estate brokerage must have a designated principal broker.

    Associate broker: An associate broker holds a broker’s license but chooses to work under another broker instead of operating their own brokerage. They often have more experience than agents and may take on mentoring or leadership roles within the firm.

    How to choose between working with an agent or a broker

    As a home buyer or seller, you must consider the difference between a real estate agent and a broker. While they share responsibilities, there are differences to consider that make the best fit for your goals. Most likely, you will start by choosing a real estate agent. When you hire an agent, you are automatically gaining access to the expertise of their supervising broker, as the agent’s work is the responsibility of the brokerage firm.

    • Work with an agent when you need hands-on assistance, strong negotiation skills, and a professional who specialises in your local market. Agents are typically focused entirely on client service.
    • Work with a broker if you are looking to hire a managing partner or if you specifically want to work with the principal of the firm. Some highly experienced brokers choose to work directly with clients as well.

    The most important step is finding a professional, regardless of their title, who has a proven track record, understands your goals, and prioritises your best interests.

    Frequently asked questions

    Does a broker make more money than an agent?

    A broker may have a higher potential income because they can earn a portion of the commission from the transactions of all the agents they supervise, in addition to any commissions from their own sales.

    Can a real estate agent be a broker at the same time?

    Yes. A professional who holds a broker’s license may choose to act as a real estate agent and work under another brokerage, or they may choose to use their broker’s license to open and run their own firm.

    Is one title better than the other for a client?

    Neither title is inherently “better” for a client. While a broker has more advanced training, a highly experienced and successful agent can provide just as effective service. The quality of the individual professional is more important than the level of their license.

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    Pablo Alvarez

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  • 2025 Housing Market Year In Review: Is There Anybody Out There?

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    13 housing trends that defined another slow year, including record-high house prices, falling mortgage rates, and a gridlocked market 

    2025 was a difficult year for the housing market. The affordability crisis continued. The spring and summer homebuying seasons hardly happened. The homeowner population dropped. Buyers remained out of reach, pushing sellers to offer concessions or price cuts. Add in political issues, including tariffs and a government shutdown, and consumers were dealt a difficult hand.

    Still, there were some positives. Wages increased faster than housing costs for the first time since 2016, and buyers grew more comfortable with 6% mortgage rates, helping ease the rate-lock issue. 

    Regional trends continued, too. The Sun Belt continued its years-long slowdown, while the Rust Belt remained popular.

    “This was another unusual year for housing, with a twist,” said Daryl Fairweather, Redfin Chief Economist. “High prices continued to sideline homebuyers, but this year, home sellers followed suit. As the months went by, more sellers pulled their listings in response to weak demand, tightening an already strained housing supply and helping prop up prices. Unfortunately, affordability is unlikely to improve substantially until homebuilding picks up or mortgage rates plummet.”

    Below are trends, data points, and visuals that defined the 2025 housing market. 

    All data was aggregated from January through November 2025 unless otherwise stated. Data came from Redfin, the U.S. Census Bureau, FRED, NAR, and/or public records. For questions about metrics, read our metrics definitions page.

     

    1. Home prices reached another all-time high

    The U.S. median home sale price reached a new all-time high of $446,000 in June. Overall, prices in 2025 remained above last year’s then-record levels, with every month surpassing the corresponding median sale price from 2024.

    When averaging for the entire year, 2025’s median sale price was 1.7% higher than 2024—around $7,400.

    Affordability remained a major issue for buyers and sellers, especially as tariffs, inflation, and elevated mortgage rates impacted the economy. The Trump Administration has stated that prices will drop in the near future, but economists and consumers are wary. The affordability crisis is accelerating the fastest in rural America, where buyers need to earn nearly twice as much as they did before the pandemic to afford a typical home.

    Luxury prices also spiked in Sun Belt metros like West Palm Beach, helping redefine the upper end of the housing market as wealthy buyers flock south.

    2. San Jose was the most expensive metro area for homebuyers in 2025

    Taking the top spot for the second year in a row, San Jose was the most expensive major metropolitan area for homebuyers in 2025. The median sale price in San Jose averaged $1,617,659, up 3.3% ($51,000) from last year. The metro hit a price peak of $1,700,000 in April, which was $100,000 more than second-place San Francisco.

    • The top six most expensive metros were all in California
    • House prices generally rose across the board, with Cleveland (9.2%), Pittsburgh (7.1%), and Milwaukee (7.1%) posting the largest annual increases.

    The top five most expensive metros to buy a home

    Metro Average median sale price
    San Jose, CA $1,617,658
    San Francisco, CA $1,522,535
    Anaheim, CA $1,198,636
    Oakland, CA $929,792
    Los Angeles, CA $916,401

    3. Detroit was the most affordable metro area for homebuyers in 2025

    Once again, Detroit topped the list as the most affordable major metropolitan area for homebuyers in 2025. The median sale price in Detroit averaged $202,739, up 6.2% (~$12,000) from last year. Even so, the area hit a record high in July, when prices reached $217,000.

    Detroit has been the most affordable major metro for years, with prices consistently less than half the national average. Even when you zoom in on individual cities, Detroit remains cheapest: The average median price for the city proper was $92,303. 

    However, many locals still struggle to afford it. Detroit has one of the highest poverty rates and lowest median household incomes in the country, exacerbating existing inequalities and making housing harder to find for underrepresented groups. Prices have been rising faster than the national rate since mid-2024, too, which has added to the pressure.

    • The vast majority of low-cost cities are in the Rust Belt, where incomes are lower, homes are older, competition is higher, and prices are rising fastest. 
    • Prices dropped the fastest in Sun Belt metros, with Jacksonville (-3.1%), Oakland (-2.7%), and Dallas (-2.2%) posting the largest annual decreases. 

    The top five most affordable metros to buy a home

    Metro Average median sale price
    Detroit, MI $202,739
    Cleveland, OH $243,830
    Pittsburgh, PA $250,250
    St. Louis, MO $280,294
    Philadelphia, PA $293,774

    4. Home sales remained historically slow

    An average of 424,078 homes were sold every month in 2025, similar to last year but far below the 2020 rate, when 585,000 homes sold every month. When looking at just existing home sales, Redfin expects there to be about 4.24 million in 2025—on the lowest end of the 4-6 million average and in line with 2023 and 2024. Note that home sales are seasonally adjusted.

    Year-over-year home sales were mostly flat, but sunk heading into 2026. In 2024, home sales increased because buyers accepted that mortgage rates would remain elevated, but that optimism dropped this year as prices kept rising and economic uncertainty rose.

    This slowdown affected all corners of the market, including luxury. High-end home sales fell to their lowest level since at least 2013. 

    • The month of May had the fewest home sales, at 416,400. 
    • Home sales increased across much of the Rust Belt and South, while Florida’s slowdown persisted.
    • Ultra-luxury homes still changed hands at a normal pace, as wealthy buyers were better insulated from economic pressures.

    The top five metros where sales dropped the most

    5. Mortgage rates steadily dropped throughout the year

    “Mortgage rates again played a large role in quieting the housing market this year, but with notable improvements,” noted Fairweather. “Rates averaged 6.6% in 2025, compared to 6.7% last year. While this didn’t bring many buyers out of the woodwork, it did bring costs down, which we expect to only improve in the coming years.” 

    Zooming out, weekly average 30-year rates fell nearly an entire percentage point from their high of 7.16% in January to their low of 6.19% in October, before evening out at ~6.3% to close out the year. Technically, 2024’s rates dipped slightly lower (6.14%), but 2025 saw more consistent relief.

    Zooming in, though, mortgage rates were fairly volatile, with some days seeing large shifts in anticipation of tariff announcements, economic reports, or Federal Reserve (Fed) meetings. The government shutdown added a layer of uncertainty, too.

    Redfin predicts that mortgage rates will average 6.3% in 2026.

    6. Housing inventory increased substantially—with a catch

    On average, 1.48 million homes were listed for sale or pending every month in 2025, up an astonishing 18.3% from last year. Monthly inventory peaked at 1.63 million in July.

    However, as the year went on, inventory growth slowed as sellers realized they couldn’t get the prices they hoped for and buyers became harder to come by. 

    Starter homes were a different story. Starter-home listings—those in the 5%-35% price tiers—actually rose alongside sales. Consequently, prices increased quickly: In some metros, a starter home now costs $1 million.

    • Housing inventory rose the most in the Sun Belt and pricey coastal metros, where buyers were in charge. Inventory fell in the most competitive cities, clustered in the Rust Belt.

    The top five metros where inventory increased the most

    The top five metros where inventory decreased or rose the slowest

    7. Months of supply reached a recent high

    While inventory measures the number of homes currently available for sale, months of supply measures the amount of time it would take those homes to sell at the current rate of sales. Four to five months of housing supply is considered a balanced market, with more indicating a buyer’s market and less indicating a seller’s market. 

    The average stock of housing supply across every month in 2025 was 3.5 months, up from 3 months last year. 

    But as buyers stepped back later in the year, more sellers decided to hold off on listing their home altogether, pushing supply back down. It remained a strong but unusual buyer’s market, where costs were high but competition was low. Through the first eight months of the year, just 2.8% of the nation’s homes changed hands—a marginal improvement over last year’s low. 

    That said, conditions varied sharply by region. In some cities, buyers had to fight for every home. Cities in Upstate New York and the Bay Area were red-hot, often selling within two weeks.

    8. New listings jumped nearly 7%

    In line with inventory, new listings made major gains this year. An average of 565,578 homes were listed every month, up 6.8% from last year and well above 2023’s record low. New listings have consistently improved over the past three years.

    These listings translated to slightly more sales, but high prices kept most buyers on the sidelines. Plus, as sellers became more skittish later in the year, new listings dropped significantly. Supply improved, but end-of-year trends pointed towards a tighter market.

    9. New construction continued to lag

    The U.S. saw an average of 1.38 million new homes started monthly in 2025, unchanged from 2024 and down from 1.42 million in 2023. 

    According to most experts, the largest contributor to the U.S. housing crisis is a lack of home building. There just aren’t enough homes for people who want them. The deficit changes from source to source, but most estimates range from two to six million units. 

    Building plummeted during the Great Recession but saw a small resurgence during the pandemic, particularly in disaster-prone areas. However, construction began losing steam in 2022, and 2025 continued the decline. The slowdown has largely been due to low buyer demand and higher development costs, leaving many builders focused on selling existing inventory.

    The housing shortage gets worse when you look at affordable housing (which includes rentals). Nationwide, there is a shortfall of 7.1 million homes, with zero states meeting their affordable housing needs.

    Still, there are signs of optimism. “The current market is discouraging, but there is reason to hope,” reassured Chen Zhao, Redfin’s Head of Economics Research. “Policymakers and voters have made it clear that improving affordability is a top priority, primarily by building more low-cost homes. Multiple bipartisan bills aimed at doing just that are making their way through the government, which could influence development in 2026.”

    • Housing completions fared better than housing starts, with an annualized rate of 1.6 million new homes finished as of August (the most recent data available).
    • Permits to build new housing fell this year, reversing course from last year but in line with their post-pandemic slump.

    10. Inflation crept back up as economic uncertainty simmered

    Inflation was key to the economy in 2025, as President Trump enacted policies including tariffs, a new spending bill, and immigration crackdowns—actions that many economists view as inflationary. In fact, a report found that inflation could have dropped by about one-third if it weren’t for tariffs.

    Inflation remained well above the Fed’s 2% target, generally averaging around 2.7%. The Fed cut interest rates three times but remained cautious amid economic and job market uncertainty.

    The rise of AI also played a large role in the economy. As AI investment ramped up, which fueled essentially all of the year’s stock market gains, fears of an AI-bubble grew louder.

    11. The typical home took over a month and a half to sell

    Homes spent an average of 48.5 days on the market in 2025—nearly six days longer than last year and the longest since the pandemic. Sales continued their dramatic decline from the record-breaking pace seen in 2021. 

    Even so, by historical standards, homes sold relatively quickly. In 2012, the typical home sat on the market for 80–90 days before selling.

    The slowdown was especially visible in September, when 70% of all listings nationwide had sat on the market for more than 60 days (called a “stale” listing). Former pandemic boomtowns like Miami, FL (84.6%) and Austin, TX (82.8%) saw even higher shares of stale listings, demonstrating how much they have slowed. 

    Time on market varied widely by region, with Rust Belt metros seeing very fast sales and Sun Belt metros easing further.

    • Delistings, where a seller removes their home from the market, remained elevated due to limited demand. 
    • Austin became the strongest buyer’s market later in the year, with nearly twice as many home sellers as buyers. 

    The top five metros where homes sold the fastest

    The top five metros where homes sold the slowest

    12. All-cash purchases remained at historic highs

    30% of homes were purchased entirely with cash in 2025—down from 31% last year but still well above pre-pandemic levels. 

    All-cash sales generally follow the same trend as the rise and fall of mortgage rates: When rates move down, the percentage of all-cash sales moves down; when rates go up, all cash-sales go up. So, as mortgage rates skyrocketed in 2022, all-cash purchases followed suit. They have remained elevated since, but are falling as mortgage rates drop and economic uncertainty rises.

    Luxury buyers and investors were much more likely to pay in cash, which helped them bypass interest rates altogether and secure a better deal. All-cash payments were largest in California, where housing is the most expensive, and most popular in Florida and the Rust Belt.

    The top five metros with the highest share of all-cash purchases in 2025

    Data is from a Redfin analysis of county records across 40 of the most populous U.S. metropolitan areas, dating back through 2011.

    13. Investor activity was flat, but still well above pre-pandemic levels

    Real estate investors purchased an average of 18% of all homes in 2025—unchanged from 2024 but trending downward. Activity varied by region, with some of the largest pullbacks in parts of Florida, particularly in the condo market. 

    Compared to the blistering pace investors set in 2021-2022, this year was relatively calm. Investor market share had already dropped in 2023 as higher borrowing costs and prices curbed consumer demand, and it hasn’t rebounded since. 

    Even so, investor market share remains far above historical norms. In 2015, investors owned around 15% of homes, and in 2000, their share was just 7%. 

    The top five metros with the highest investor market share in 2025

    Data was analyzed on a quarterly basis and includes all property types unless otherwise stated. Data is through September (Q3). Metro-level data measured 40 of the most populous U.S. metropolitan areas. 

    Looking forward

    The 2025 housing market was another difficult one for many homebuyers and sellers, but what does Redfin predict for 2026? Read our 2026 Housing Market Predictions to learn more.

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    Jamie Forbes

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  • Should You Get a Pre-Listing Appraisal Before Selling Your House?

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    As home prices fluctuate and buyers focus on affordability, sellers might take a closer look at how they price their homes. One question that comes up often before listing: Can a pre-listing appraisal help set the right asking price before a home hits the market.

    In most cases, sellers don’t need an appraisal before listing. Homes are typically priced using recent comparable sales, local market conditions, and buyer demand—all of which can change quickly, sometimes even faster than what an appraisal reflects. Still, in certain situations, sellers might turn to pre-listing appraisals if pricing is unclear or a third-party valuation can provide additional support.

    The difference between the two is key. An appraisal is a report of a property’s value based on a number of factors like past sales data, square footage, and features. The market value comes down to what buyers are willing to pay. Understanding this can help sellers decide whether a pre-listing appraisal is a useful tool, or an extra step they can skip—whether selling a home in Fort Lauderdale, FL or a house in Newark, NJ.

    In this article
    What is a pre-listing appraisal?
    Pre-listing appraisal cost
    Appraised value vs market value
    When a pre-listing appraisal works
    When a pre-listing appraisal isn’t needed
    Is a pre-appraisal worth it?
    FAQs

    What is a pre-listing appraisal?

    A pre-listing appraisal gives sellers a professional opinion of what their home is worth before it goes on the market. It’s done by a licensed third-party appraiser, then the valuation is documented in a written report that follows standardized guidelines.

    Most appraisals are ordered by lenders after a buyer is under contract to verify the home’s value matches the loan amount. When sellers request one before listing, it’s often because recent sales aren’t viable comps for that home, or a professional, documented valuation is needed for planning or legal reasons.

    What goes into an appraisal?

    An appraiser starts with an in-person inspection of the property, looking at the home’s size, layout, condition, and features. From there, they compare the home to recently sold properties nearby, adjusting for differences like square footage, upgrades, lot size, and overall functionality.

    The final value is based on what similar houses have sold for, rather than list prices, online estimates, or what a seller hopes they can get for the home.

    How much does a pre-listing appraisal cost?

    The average cost of a pre-listing appraisal sits at $450, with prices varying by region and by property. Different types of homes, luxury properties, or houses in rural areas or with fewer comparable sales will tend to cost more.

    Some pre-listing appraisals could cost as little as $300, and others can be as high as $900.

    • Typical range: most pre-listing appraisals fall roughly between about $300 and $550.
    • Variation by home type: larger homes, unique properties, or multi-unit buildings can cost significantly more because they require more time and research.
    • Location matters: appraisal fees tend to be higher in major metropolitan areas and lower in more suburban markets, reflecting local demand and cost of living.

    Most of the time, sellers receive the completed report within about a week, but timelines can stretch out longer if you’re in a busy market or for properties that are out-of-the-way or need a more detailed analysis.

    Appraised value vs. market value

    When buyers and sellers talk about what a home is worth, there are often two distinct valuations at play: the price buyers are willing to pay and what an appraisal can support.

    • Market value reflects what buyers are actually paying for a home in the current market. The market value for a house is revealed through real-time sales and listings, and can change quickly as demand, inventory, interest rates, or competition shift.
    • Appraised value is a documented value of a property that’s largely based on recent closed sales, home features, size, and location. Because the appraised value relies on past transactions, it can lag behind fast-moving markets or miss sudden shifts in demand.

    Why the appraised value and market value can differ

    Appraisals document data-backed value, not buyer behavior. Appraisers rely mostly on closed sales to support their valuations, which reflect where the market has been, not always where it’s headed.

    Market value is often determined using pricing tools like comparative market analysis (CMA), which often factor in:

    • Pending and active listings.
    • Days on market.
    • Multiple-offer activity and buyer competition.

    These tools can spot changes in demand before they show up in closed sales, which is why appraised value and market value don’t always match.

    How market conditions affect home value

    • Rising market: Homes might sell for more than recent comps support, pushing the market value above the appraised value.
    • Strong demand: Competition amongst buyers can drive prices beyond what an appraisal supports on paper.
    • Slower market: Appraisals often align more closely with list price and can act as a more conservative anchor point.

    When you should get a pre-listing appraisal before selling your house

    Most of the time, sellers don’t need to get an appraisal before listing their home for sale. Pre-listing appraisals help sellers the most in unique pricing situations where having a neutral third-party valuation can provide clarity and documentation that goes further than what market data alone can offer.

    Sellers might consider a pre-listing appraisal in their pricing strategy if:

    • The home is hard to compare to active or recent sales.
      Unique layouts, high-end custom finishes, large lots, rural properties, or luxury homes might not have clear, recent comps. In those cases, an appraisal can take into account past home sales in other areas to help establish a baseline when a standard comparative market analysis is lacking important information.
    • You’re selling without an agent.
      For-sale-by-owner (FSBO) sellers don’t have access to a professional CMA or pricing strategy. An appraisal can help by-owner sellers by providing a professional valuation opinion to help avoid pricing too high or too low.
    • The sale involves legal or financial planning.
      Estate sales, divorces, trusts, or partnership buyouts can require a documented, unbiased valuation. In these situations, the formality of the appraisal, not just the final number, is the primary purpose.
    • There’s a disconnect over pricing.
      When a seller and agent disagree on list price, an appraisal can act as outside, unbiased evidence, helping reset expectations or support a pricing conversation that’s based on third-party data. If a seller feels an agent is trying to “buy the listing” through a high suggested list price, an appraisal can bring both parties back to neutral ground.
    • The market is volatile and fluctuating.
      If the market is continuously shifting and prices are fluctuating or hard to predict, a pre-listing appraisal can help ground pricing decisions. While an appraisal won’t predict future offers, it can help sellers understand how much of their pricing strategy is supported by documented data, and how much depends on current demand. 

    Do you have to get your house appraised before you sell it?

    A lot of the time, a pre-listing appraisal doesn’t necessarily provide new or helpful information for sellers. Sometimes a pre-appraisal can even complicate the pricing strategy. In straightforward sales, market data and buyer feedback can be more than enough information to price the home well, and save on the cost of an unnecessary report.

    Most sellers can skip the pre-listing appraisal when they are:

    • Working with an experienced agent and a strong CMA.
      A well-prepared comparative market analysis draws from recent sales, pending listings, and current competition. In many markets, that combination offers a more timely view of value than an appraisal that’s relying on data from closed deals.
    • The neighborhood has plenty of similar homes and sales.
      Homes in subdivisions or areas with more turnover are usually easier to price. When recent comps closely match your home, an appraisal is unlikely to show anything that isn’t already visible in the available data.
    • There’s a tight timeline or budget.
      Appraisals cost money and add time. For sellers that want to list quickly or minimize upfront expenses, the added step might not be worth it, especially if you already feel confident in your real estate agent’s suggested list price.
    • The market itself can help determine the price.
      In lower-risk markets, listing exposure and early buyer actions can provide faster and more accurate feedback than a pre-sale valuation. Showings, offers, and days on market can quickly tell a seller whether a price is too high, too low, or right on target.

    Is it worth getting a pre-listing appraisal?

    For most sellers, a pre-listing appraisal probably isn’t needed. Homes are most commonly priced using recent comparable sales, current market conditions, and buyer demand—factors that tend to be captured more quickly through a strong CMA and real-time market feedback than through a formal pre-appraisal.

    But a pre-listing appraisal can be worth the time and cost in specific situations, especially when pricing is unclear, comparable sales are limited, or a documented, third-party valuation is needed for legal or planning purposes. At the end of the day, selling a home is less about finding a single, “correct” value and more about choosing a pricing strategy that reflects both the data and the market you’re selling into.

    FAQs: Do sellers need a pre-listing appraisal?

    Do houses usually sell for more or less than appraised value?
    In competitive or upticking markets, homes can sell for more than their appraised value when buyers compete and push the prices higher. In slower markets, sale prices are more likely to align with (or fall below) appraisal values, since demand is weaker and pricing is more controlled by recent sales data.

    Can you get an appraisal before listing a house?
    Sellers can get what’s called a pre-listing appraisal at any time before putting a home on the market. Pre-appraisals are voluntary, paid for by the seller, and separate from the appraisal a lender will order after a buyer is under contract.

    Can a pre-listing appraisal prevent a buyer’s low appraisal?
    Not necessarily—while a pre-listing appraisal can help sellers anticipate any appraisal issues, the buyer’s lender will order their own appraisal. Because different appraisers might use different comps or assumptions, the buyer’s appraisal can still come in lower, especially if the market is changing quickly.

    Should you disclose your pre-listing appraisal to buyers?There’s no rule that requires sellers to disclose a pre-listing appraisal, but sharing it with buyers can show transparency and support pricing decisions. On the other hand, disclosing the pre-appraisal if it comes back lower than expected can potentially hurt negotiations. Sellers should discuss strategies with their agent.

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    Ashley Cotter

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  • Is FSBO Worth It for Home Sellers?

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    Is FSBO, or “for sale by owner,” worth it? The short answer is, it depends on your experience, the current housing market, and how much time you have to dedicate to the process. The main advantage of FSBO is the potential to save the listing agent’s commission. 

    The key trade-off is whether those savings are enough to offset the extra work, potential legal risks, and the possibility of selling your home for less than an agent could have achieved. In this Redfin real estate article, we will explain if FSBO is worth it (and when it is not) to help you make the best decision as you prepare to sell your home in Kansas City or Salt Lake City. 

    What does selling FSBO truly save you?

    To determine is FSBO worth it, you need to understand the financial savings. The primary motivation for a for-sale-by-owner transaction is financial. By choosing not to hire a listing agent, you avoid paying their commission, which typically ranges from 5-6% of the sale price.

    For example, on a $500,000 home, this could mean saving $25,000 to $30,000.

    The financial picture often includes these costs, regardless of FSBO or agent:

    • Buyer’s agent commission (typically 2.5% to 3%)
    • Closing costs (e.g., transfer taxes, title insurance)
    • Marketing and staging expenses

    The cost of going it alone

    While you save on the listing commission, other costs and risks come with managing the entire sale yourself. For the best chance of a successful sale, you must be prepared to handle these key areas:

    • Pricing: FSBO homes are often priced incorrectly. An agent uses comparable sales data (comps) and market expertise to set a strategic price. Underpricing means leaving money on the table, and overpricing leads to long listing times.
    • Negotiation: You will handle all negotiations with the buyer’s agent or the buyer directly. This includes the initial offer, repairs, and credits after the inspection. Professional negotiators often secure a better final price and terms.
    • Marketing: You are responsible for professional photos, crafting compelling listing descriptions, and getting the listing onto major real estate websites, including the Multiple Listing Service (MLS).
    • Legal paperwork: You must prepare and understand all disclosure forms, purchase agreements, and closing documents, which vary by state and local law. Errors here can lead to costly legal trouble later. When considering is FSBO worth it, remember that the risk of legal trouble is an important factor to consider. 

    When is FSBO a good option?

    FSBO can be a profitable and lower-stress option under specific conditions.

    • You are selling to someone you know: If you have already agreed to sell your house to a family member, friend, or neighbor, the listing process is largely bypassed, making FSBO a simple way to handle the transaction’s closing logistics.
    • You have real estate experience: If you are a licensed agent, an investor, or have successfully managed multiple real estate transactions, you already possess the knowledge to handle the complex parts of the sale.
    • It is a strong seller’s market: In a highly competitive market where homes sell quickly with multiple offers, an agent’s marketing and negotiating skills may be less critical. However, even in these markets, an agent can often drive the final price higher.

    When is hiring an agent worth the commission?

    The commission is the cost of professional expertise, marketing reach, and risk mitigation. For most people, hiring a trusted real estate professional is worth the expense.

    You should consider hiring an agent if:

    • It is your first time selling a home. The process can be overwhelming, and an agent’s guidance is invaluable.
    • You need the highest possible sale price. Agents’ pricing and negotiation strategies are designed to maximize your net profit.
    • Your home has complexities. Properties with structural issues, zoning questions, or unique features benefit from an agent who knows how to position them correctly.
    • You value your time. An agent handles all showings, calls, administrative tasks, and troubleshooting, allowing you to focus on your move.

    Is FSBO worth it? 

    The final answer is up to you. While the opportunity to save the agent’s commission is a powerful incentive, this must be weighed against the potential for a lower sale price, the time investment, and the increased risk of legal errors. 

    For most first-time or average sellers, the expertise of a trusted agent often pays for itself by securing a higher final sale price and providing essential professional protection. The decision to go FSBO should be a calculated choice based on your personal experience and a well-thought-out assessment of the current real estate market and personal confidence.

    Frequently asked questions: 

    What percentage of FSBO homes sell?

    In 2024, FSBO homes accounted for 6% of home sales. “The typical FSBO home sold for $380,000 compared to $435,000 for agent-assisted home sales.” While this figure changes with the market, data generally shows that a significant portion of FSBO listings either fail to sell or the owner gives up and hires an agent. You must be prepared for the possibility that the process will take longer than expected.

    Do I still need to pay the buyer’s agent commission with FSBO?

    Yes, it is recommended. Offering a commission to the buyer’s agent incentivizes them to show your property to their clients. Buyers who use an agent rarely pay that agent’s commission directly, so refusing to pay it dramatically limits the number of buyers who will see your home.

    What are the biggest legal risks with FSBO?

    The biggest legal risks involve property disclosures and the sales contract. Laws vary significantly by state and local jurisdiction. If you miss a required disclosure or if there is an error in the purchase agreement, you could face legal action or financial penalties even after the sale is complete. An agent provides a layer of protection and familiarity with the proper paperwork.

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  • Do I Need a Real Estate Agent to Sell My Home?

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    “Do I need a real estate agent to sell my home?” The short answer is no. While selling on your own is possible, it means taking on more responsibility. While it’s possible to navigate the real estate market independently, working with a real estate agent provides significant advantages, making the process smoother and more successful. 

    As you look to sell your home in Seattle or Chicago, this Redfin real estate article will teach you the benefits of working with a real estate agent for a better home-selling experience. 

    When an agent can be a huge help

    When asking, “Do I need a real estate agent?” you must decide what you are prepared to handle. There are several benefits of a real estate agent that can be particularly beneficial in several situations. They are experts in local market conditions, negotiation strategies, and the complex paperwork involved in property transactions. Their job is to help you achieve your real estate goal of selling your current home for the best possible price. How an agent helps: 

    • Navigating complex markets: In a hot market, an agent can help you act quickly and strategically. In a slower market, they can employ effective marketing to attract buyers.
    • Time constraints: If you have a busy schedule, an agent can handle the time-consuming tasks of showing and paperwork.
    • Lack of experience: First-time sellers can greatly benefit from an agent’s guidance through unfamiliar territory.
    • Negotiation challenges: Agents are skilled negotiators who can advocate for your best interests, securing a better deal.
    • Avoiding pitfalls: The real estate process is full of legal documents and potential issues. An agent helps ensure everything is handled correctly, minimizing risks.

    Can I sell my home myself?

    Selling a home without an agent, known as “For Sale By Owner” (FSBO), is an option. It can save you commission fees, but it also means you’re solely responsible for every aspect of the transaction. This includes:

    • Marketing your property
    • Handling inquiries and showings
    • Negotiating prices and terms
    • Understanding and preparing legal documents
    • Coordinating inspections and appraisals
    • Managing the closing process

    While possible, it requires a significant amount of time, effort, and a good understanding of real estate laws and practices. Mistakes can be costly.

    Do I need a real estate agent to sell my home?

    No, it’s not legally required. You can sell on your own, but there are benefits to having a real estate agent. They can make the process faster, smoother, and more profitable. They offer expertise in pricing strategies, market trends, and buyer behavior, which can help you avoid costly mistakes and position your home competitively. Many sellers find that the higher sale price achieved with an agent offsets the commission.

    Frequently asked questions: Do I really need a real estate agent?

    Is paying a real estate agent’s commission worth it?

    Often, yes. Commissions typically range from 5-6% of the sale price, but experienced agents may secure higher offers and better terms that offset or even exceed that cost. The main benefit of a real estate agent is to reduce stress by handling the details from listing to closing while working to get you the best sale price.

    How do I choose the right real estate agent?

    Interview at least two or three agents to find the right real estate agent for you. Look for:

    • Local experience in your neighborhood or city.
    • Strong sales record and list-to-sale price ratio.
    • Clear communication style and responsiveness.
    • Positive client reviews and references.
    • A marketing plan tailored to your property.

    What happens if I don’t use a real estate agent?

    You’ll be in charge of every step: Pricing, marketing, buyer screening, negotiation, and closing. While you keep full control, you also carry the risk of legal mistakes, undervaluing your home, or missing potential buyers. Without an agent’s network and expertise, it may take longer to sell or result in a lower net profit.

    If you are represented by an agent, this is not a solicitation of your business. This article is for informational purposes only, and is not a substitute for professional advice from a medical provider, licensed attorney, financial advisor, or tax professional. Consumers should independently verify any agency or service mentioned will meet their needs. Learn more about our
    Editorial Guidelines here.

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  • What Does Motivated Seller Mean in Real Estate?

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    Key takeaways

    • A motivated seller’s primary goal is achieving a quick, hassle-free transaction over holding out for the highest possible price.
    • Urgency is a strategic advantage, often driven by major life events such as a job relocation, financial necessity, or a need to close on a new home.
    • Sellers can position their listing for a fast sale through strategic pricing and by emphasizing the need for a quick, clean close.

    A motivated seller in real estate is an owner who has made a strategic choice to prioritize the quick completion of their home sale over maximizing their profit. This intentional focus on speed means they are typically more willing to negotiate on the list price and closing terms than a standard seller. Making this intention clear in your listing signals to buyers that you are open to negotiation or to accepting terms that speed up the transaction. As you sell your home in Nashville or in Reno, this Redfin real estate article will explain what a motivated seller means and if it’s the right choice for you.

    How to position your listing for a quick sale

    To clearly communicate your motivation and attract a buyer focused on a fast close, consider these steps:

    • Price strategically for immediate offers: Set a competitive price, possibly just below market value, to generate strong, immediate interest. A recent, significant price drop is an even stronger signal of your urgency and can prompt quicker offers.
    • Emphasize closing speed in the listing: Use clear and professional language in the listing description, such as “Owner requires a quick close,” “Looking for a fast, straightforward transaction,” or “Quick closing date preferred.”
    • Be transparent about your situation: Allow your experienced real estate agent to strategically share your need to relocate quickly for a job or a similar time-sensitive situation. This often encourages buyers to present cleaner offers that prioritize certainty.
    • Ensure the home is market-ready: If the property is vacant, highlight this. A vacant home eliminates the complications of scheduling around a seller’s move and can expedite the closing process significantly.

    Trade-offs and potential pitfalls of being a motivated seller

    While prioritizing speed can be the best move for your personal situation, it is important to be aware of the trade-offs. The main risk is sacrificing potential profit for a quicker close.

    • Accepting a lower sale price: The most common consequence is selling your home for less than its peak market value. The urgency that attracts a quick buyer is also the reason they will likely submit an offer below the asking price.
    • Loss of negotiation leverage: Once your motivation is communicated, you lose the ability to hold out for better terms. Buyers know your primary need is speed, which can limit your power to counter-negotiate on small concessions or a higher price.
    • Risk of opportunistic buyers: Some buyers may view your motivation as an opportunity to submit an unfairly low offer, testing the limits of your urgency. It takes discipline and strong representation from your agent to navigate these proposals.
    • Double-edged signal: Clearly stating your need for a quick close attracts the right buyer, but it also publicly broadcasts your vulnerable position, which can invite less favorable initial offers.

    Seller’s strategy for a fast and certain close

    When you have multiple offers, your goal shifts from securing the highest number to securing the most certain and least complicated contract. You should prioritize the following terms over a marginally higher price:

    • Focus on a short closing timeline: A buyer who proposes a 30-day closing or less is directly addressing your primary need. A faster close offers immediate financial relief and certainty.
    • Weigh the contingency load: Offers with few or no contingencies (inspection, financing, or the sale of the buyer’s current home) are less likely to fall apart. Certainty is often more important than a slight price increase that carries a higher risk of complications.
    • Favor “as is” offers: If a buyer is willing to accept the property in its current condition, it saves you the time, hassle, and expense of managing repairs. This is a powerful, non-monetary benefit that simplifies the entire process.
    • Prioritize pre-approved financing: A buyer who provides a strong pre-approval letter gives you confidence that their financing is secured, reducing the chance of delays or collapse before closing. A clean offer that looks easy to accept and close is often more appealing than a higher-priced offer with potential complications.

    Frequently asked questions:

    What is the main difference between a regular seller and a motivated seller?

    A regular seller’s top priority is maximizing profit. A motivated seller prioritizes achieving a guaranteed, quick, and hassle-free transaction. They are willing to accept a competitive price to ensure a quick closing date.

    Does being a motivated seller mean my property is distressed?

    No. While some sellers of distressed properties are motivated, many others are simply experiencing a significant life change, like a job transfer or needing to close on a new home. For these sellers, time and certainty are simply more important than securing the maximum dollar.

    Is positioning myself as a motivated seller a good strategy for me?

    Depends. Marketing yourself as a motivated seller lets you be open to negotiation on price and terms, attracting serious, qualified buyers who value a quick process. This leads to a faster and less stressful closing experience for you. However, everyone’s situation is different. Please discuss with your real estate agent.

    If you are represented by an agent, this is not a solicitation of your business. This article is for informational purposes only, and is not a substitute for professional advice from a medical provider, licensed attorney, financial advisor, or tax professional. Consumers should independently verify any agency or service mentioned will meet their needs. Learn more about our
    Editorial Guidelines here.

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  • When to Lower the Price of Your House: Price Reduction in Real Estate

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    Deciding to sell your home is a big step, and setting the right price is crucial. But what happens when your home isn’t getting the attention you hoped for? In these cases, it might be time to consider a real estate price reduction. As you prepare to sell your home in Portland or Salt Lake City, this Redfin real estate guide will help you understand when and why lowering your home’s price can be a smart move, ensuring a successful sale.

    Signs it’s time for a price adjustment

    Recognizing the signals that indicate a price reduction is needed can save you time and stress. Some common changes are: 

    • Lack of interest: If your home has been on the market for a few weeks with minimal showings or inquiries, it’s a strong indicator that the price might be too high. Buyers often scroll past listings that seem overpriced compared to similar properties.
    • No offers: Even if you’re getting showings, a complete absence of offers suggests that potential buyers are not seeing the value at the current price. They might be waiting for a price drop or looking elsewhere.
    • Negative feedback on price: Sometimes, realtors or potential buyers will subtly (or not so subtly) hint that your home is overpriced. Pay close attention to this feedback, as it’s a direct reflection of market perception.
    • Longer days on market (DOM): If your home’s days on market are significantly higher than comparable homes in your area, it signals to buyers that something might be an issue, often leading to lower offers or continued lack of interest.
    • Market changes: The real estate market changes. Interest rate hikes, an increase in inventory, or a general slowdown in buyer activity can all influence a real estate price adjustment to remain competitive.
    • New comparable listings: If several similar homes in your area have recently come on the market at a lower price point, your home may appear overpriced by comparison. Regularly review new listings in your neighborhood to stay competitive.
    • Seasonal slowdowns: In some markets, certain seasons experience slower buyer activity. If your home has been on the market through a typical slow period, a price reduction can help stimulate interest as the market picks up.

    Understanding the impact of overpricing in real estate

    Overpricing your home can have several negative consequences that ultimately hinder your sale.

    • Missed opportunities: The initial weeks on the market are critical. Overpricing can cause you to miss out on motivated buyers who are actively searching and making offers.
    • Stigma of a stale listing: Homes that sit on the market for too long can develop a “stale” reputation. Buyers may assume there’s something wrong with the property, even if the only issue is the price.
    • Lower final sale price: Ironically, homes that are initially overpriced often end up selling for less than if they had been priced correctly from the start. This is due to extended market time and potential price reductions that appear desperate.
    • Increased carrying costs: Every extra month your home is on the market means more mortgage payments, utility bills, and maintenance costs. A timely price reduction can minimize these expenses.

    How to approach a real estate price reduction

    Once you’ve decided a price reduction is necessary, approach it strategically.

    • Consult with your agent: Your Redfin real estate agent is your best resource. They have access to current market data, comparable sales, and buyer feedback. Work together to determine the optimal price adjustment.
    • Analyze comparable sales: Look at recent sales of similar homes in your neighborhood. This will give you a realistic understanding of what buyers are willing to pay.
    • Consider the percentage drop: A small, incremental price drop might not be enough to grab attention. Often, a more significant reduction (e.g., 2-5% of the original price) is needed to generate new interest and signal a serious seller.
    • Highlight new features or improvements: If you’ve made any updates or improvements to your home since it was first listed, now is a good time to emphasize them in your marketing materials to justify the new, more attractive price.
    • Re-evaluate your marketing strategy: A price reduction is also an excellent opportunity to refresh your listing photos, update your description, or explore new marketing channels to reach a wider audience.

    Frequently asked questions: Price reductions in real estate

    How much should I lower my home’s price?

    The ideal price reduction for real estate varies, but a 2-5% drop from the original listing price is often effective in attracting new attention. Your agent can provide data-driven recommendations based on your local market.

    Will a price reduction make my home look undesirable?

    Not necessarily. A strategic price reduction can show buyers that you’re responsive to the market and serious about selling. It can also bring your home into a new price bracket, attracting a fresh pool of potential buyers.

    What if I’ve already made several price reductions?

    If multiple price reductions haven’t worked, it’s time to re-evaluate your entire selling strategy. This might include making necessary repairs, staging the home differently, or even taking it off the market briefly to re-list with a fresh approach.

    How quickly should I expect results after a price reduction?

    You should typically see an increase in showings and inquiries within a week or two after a well-timed and appropriately sized price reduction. If not, another adjustment or strategy change might be needed.

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  • How Your Neighbor Can Affect Your Home’s Value

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    As a home seller, you’re focused on presenting your property in the best possible light. You’ve likely invested in staging, minor repairs, and curb appeal to attract buyers. But have you considered the influence your neighbors have on property value? 

    While you can’t choose who lives next door, understanding their potential influence is necessary. As you begin your process of selling your home in Evanston or Dallas, this Redfin real estate article will explain how neighbors affect property value and provide proactive steps to help protect your investment.

    Curb appeal and maintenance

    When potential buyers drive through your neighborhood or arrive for a showing, their first impressions are crucial. This is where the danger of your neighbor affecting property value lies. A well-maintained property with a tidy lawn, fresh paint, and an inviting exterior sets a positive tone for the entire block. If your home is immaculate, but your next-door neighbor’s property is neglected, it can detract from your efforts. Buyers might perceive a lower standard for the area, regardless of how much care you’ve put into your own home.

    However, if your neighbors also take pride in their homes, it creates a cohesive and desirable streetscape. This collective curb appeal enhances the overall value of the neighborhood, making your property more attractive to discerning buyers.

    Lifestyle and community

    Beyond what’s visible, the general atmosphere created by your neighbors can influence a buyer’s perception of your home. A quiet, respectful neighbor who maintains their property and contributes positively to the community fosters a peaceful and desirable living environment. This sense of harmony and good neighborly relations is a huge selling point, as buyers are looking for a place where they can feel comfortable and secure.

    On the other hand, disruptive neighbors can create an uncomfortable living situation. Excessive noise, frequent parties, or a general disregard for community standards can make your home less appealing. While these issues might not be immediately apparent during a quick showing, they can quickly become a concern for potential buyers who spend time in the neighborhood or do their research, ultimately impacting their willingness to pay top dollar.

    Property disputes and nuisances

    Sometimes, neighborly issues can escalate into more serious concerns, such as property line disputes or ongoing nuisances. These kinds of conflicts can be a major red flag for prospective buyers. They might fear inheriting the problem or getting involved in legal battles, which can significantly devalue your property. Even if a dispute is resolved, the history of conflict can linger and affect the home’s marketability.

    What you can do to protect your property value

    While you can’t choose your neighbors, there are proactive steps you can take to mitigate potential negative impacts and ensure your home sells for its true value:

    • Maintain your own property: Lead by example. Keeping your home and yard in pristine condition not only makes your property more attractive but can also subtly encourage neighbors to do the same.
    • Communicate respectfully: If a neighbor’s actions are affecting your property or the neighborhood’s appeal, try to address the issue directly and politely. Open communication can often resolve minor problems before they escalate.
    • Understand local ordinances: Familiarize yourself with your homeowners’ association (HOA) rules or local city ordinances regarding property maintenance, noise levels, and other common issues. This knowledge can be helpful if you need to address a persistent problem.
    • Consider mediation for serious disputes: For more serious conflicts, a neutral third-party mediator can help facilitate a resolution, which can be beneficial for all parties and for the overall appeal of your property.

    Frequently asked questions: 

    Can a messy yard next door really lower my home’s value?

    Yes, a neglected neighboring yard can negatively impact your home’s curb appeal and the overall perceived value of the neighborhood, potentially leading to lower offers from buyers.

    What if my neighbor’s actions are illegal?

    If your neighbor’s actions are illegal, you should contact the appropriate authorities, such as local law enforcement or code enforcement, depending on the nature of the issue.

    Should I disclose neighbor issues when selling my home?

    Disclosure laws vary by state, but it’s generally advisable to disclose any known issues that could materially affect the property’s value or desirability. Consult with a real estate professional or attorney for guidance.

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  • How to See How Much a House Sold For: A Complete Guide

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    Understanding the sale price of a home is extremely valuable, whether you’re a prospective buyer, a seller, or simply curious about the real estate market in your neighborhood. Knowing what homes have recently sold for can help you make informed decisions, gauge market trends, and even negotiate more effectively. 

    So, whether you’re eyeing a home in Miami or in Houston, having access to accurate sale price information gives you a competitive edge. In this Redfin real estate article, we’ll explore the best ways to find out how much a house sold for to use to your advantage.

    Online real estate websites

    One of the easiest and most accessible ways to find out a home’s sale price is through popular online real estate platforms. Real estate websites like Redfin display vast amounts of property data, including historical transaction information.

    • How to use them: Simply enter the full address of the property you’re interested in into the search bar. These sites will often display the property’s sale history, including previous sale prices and dates.
    • Tips for accuracy: While these sites are a great starting point, it’s wise to cross-reference information across multiple platforms to ensure accuracy. Keep in mind that some data might not include seller concessions or might incorporate closing costs, which could slightly skew the perceived sale price.

    Public records

    For the most accurate and authoritative information, public records are your go-to. Real estate transactions are generally public records in most states, though some “non-disclosure states” have laws that restrict public access to sale prices.

    • County tax assessor’s office: Your county tax assessor’s office maintains records that include assessed values, property taxes, and often the last sale price. Many counties offer online databases where you can search by address or owner’s name. If online access isn’t available, a visit to the office in person may be necessary.
    • County recorder’s office or county clerk’s office: These offices keep records of real estate transactions, including deeds and an “abstract of title,” which summarizes the property’s ownership history and sale prices. You can often search these records online or in person.
    • Title companies: Since title companies are involved in real estate transactions, they also maintain records of previous sales. You can request a title history on a property, which will include past sale information.

    How to see how much a house sold for with real estate agents

    If you’re looking for the most precise and up-to-date information about how much a house sold for, especially in non-disclosure states, consulting a local real estate agent is an excellent option.

    • MLS Access: Realtors have exclusive access to the Multiple Listing Service (MLS), a comprehensive database used by real estate professionals. The MLS contains detailed transaction histories and the most accurate, current sale prices, which are not always publicly available.
    • Comparative Market Analysis (CMA): An agent can provide you with a Comparative Market Analysis (CMA), a detailed report that compares a property to similar homes recently sold in the area. This analysis considers various factors like location, size, condition, and features to give you a clear understanding of market value. Many agents offer CMAs for free, without obligation.

    Why knowing the sale price matters

    Understanding why you might need this information is as important as knowing how to find it. Whether you’re considering selling your own home and want to price it competitively, or you’re a buyer looking to make an informed offer, having access to past sale prices empowers you in the real estate market. By utilizing these resources, you can gain valuable insights into property values and make more confident real estate decisions.

    Frequently asked questions: Finding how much a house sold for previously

    Are online real estate websites always accurate?

    While a great starting point, it’s wise to cross-reference information across multiple platforms. Some data might not include seller concessions or might incorporate closing costs, which could slightly skew the perceived sale price.

    What are “non-disclosure states”?

    Non-disclosure states have laws that restrict public access to sale prices, making it more challenging to find this information through public records.

    Can I use Google Search to find out how much a house sold for?

    Yes, a simple Google search with the property’s full address can sometimes reveal recent sale prices from real estate websites or news articles. It’s important to double-check the data with a trusted source.

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  • How Do Realtors Determine How to Price a Home?

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    Key Takeaways

    • Realtors use a Comparative Market Analysis (CMA) to price homes, comparing them to recently sold, active, and expired listings.
    • Market conditions, such as whether it’s a buyer’s or seller’s market and interest rates, significantly influence pricing.
    • A realtor’s local expertise and understanding of buyers are vital for effective pricing.

    When it comes to selling your home, one of the most crucial decisions made is setting the right price. It’s a delicate balance; price too high, and your home might sit on the market; price too low, and you could leave money on the table. So, how do realtors determine how to price a home effectively? It’s a process that blends market expertise, data analysis, and an understanding of your unique property. This Redfin real estate article will provide insights into agents’ pricing practices, helping you understand how your home in Boulder or Cincinnati is priced. 

    Comparative Market Analysis (CMA)

    At the heart of a realtor’s pricing strategy is the Comparative Market Analysis, or CMA. This isn’t just a quick glance at nearby listings; it’s a detailed report that evaluates the home’s value by comparing it to similar properties that have recently sold, are currently on the market, or have failed to sell in the area.

    • Recently sold homes: These are the most important comparables, as they reflect what buyers have actually paid for similar properties in the market. Realtors look at sales within the last three to six months, ideally.
    • Active listings: These show what the competition currently looks like. While they haven’t sold yet, they indicate what other sellers believe their homes are worth and what buyers are seeing.
    • Expired or withdrawn listings: These can be just as informative. They often signal what price points were too high for the market, helping to avoid similar mistakes.

    CMA vs. appraisal: understanding the difference

    It’s important to understand that a Comparative Market Analysis (CMA) is not an appraisal. While both estimate a home’s value, a CMA is a less formal assessment provided by a real estate agent to help set a listing price. 

    An appraisal, on the other hand, is a formal, unbiased valuation performed by a licensed appraiser, typically required by lenders during the mortgage process. Appraisals follow strict guidelines and are used to ensure the property’s value supports the loan amount.

    Key factors in a CMA

    Realtors analyze several factors during a CMA to ensure an accurate valuation:

    • Location: This is often the most significant factor. Proximity to good schools, amenities, transportation, and desirable neighborhoods all play a role. Even within the same zip code, specific streets or micro-neighborhoods can have different values.
    • Size and layout: The square footage of a home, the number of bedrooms and bathrooms, and the overall floor plan are important. A well-designed, functional layout often commands a higher price.
    • Age and condition: Newer homes or well-maintained older homes generally fetch higher prices. Realtors consider the age of major systems like the roof, HVAC, and plumbing, as well as the overall cosmetic condition.
    • Upgrades and features: Modern kitchens, updated bathrooms, energy-efficient windows, smart home technology, and desirable outdoor spaces (like a well-landscaped yard or a deck) can significantly boost a home’s value.
    • Lot size and characteristics: The size of the lot, its usability, and any unique features (like a view or privacy) are also taken into account.

    Adjusting for differences

    No two homes are exactly alike, even in the same neighborhood. A skilled realtor will make adjustments for differences between the home and the comparable properties. For example, if a recently sold home has a brand-new kitchen and yours doesn’t, an adjustment will be made to reflect that difference in value. These adjustments are based on market data and the perceived value of specific features to buyers.

    The importance of home condition and presentation

    Beyond the intrinsic value determined by a CMA, the condition and presentation of the home play a significant role in its appeal and ultimately, its sale price. A well-maintained home with a clean, decluttered, and aesthetically pleasing presentation will always attract more buyers and often command a higher price. 

    This includes everything from fresh paint and updated fixtures to professional staging and curb appeal. A realtor can offer valuable advice on what improvements will yield the best return on investment.

    Understanding market conditions

    Beyond individual property characteristics, realtors are constantly monitoring market conditions.

    • Buyer’s market vs. seller’s market: In a seller’s market, where demand exceeds supply, homes often sell quickly and sometimes above asking price. In a buyer’s market, with more homes available than buyers, prices may be more negotiable, and homes might take longer to sell.
    • Interest rates: Higher interest rates can impact buyer affordability, potentially cooling the market.
    • Economic outlook: Local and national economic trends can influence consumer confidence and the housing market.

    The realtor’s expertise: Beyond the data

    While data is crucial, a realtor’s expertise goes beyond crunching numbers. They bring invaluable insights gleaned from years of experience in your local market. They understand nuances that data alone might not show, such as:

    • Neighborhood trends: They know which parts of a neighborhood are gaining popularity, new developments, or upcoming zoning changes.
    • Buyer psychology: They can anticipate what buyers in your area are looking for and how they might react to certain features or pricing strategies.
    • Negotiation strategies: They can advise you on the best approach to negotiate with potential buyers to achieve your desired outcome.

    In short: How realtors decide how to price a home

    Effectively pricing a home for sale is a process that combines a realtor’s in-depth market expertise with data analysis. The key to this is the Comparative Market Analysis (CMA), which compares your property to recently sold, active, and expired listings, while also considering important factors like location, size, age, condition, and upgrades. 

    Beyond the data, a realtor’s understanding of local market conditions, buyer psychology, and negotiation strategies proves invaluable in setting a competitive price that attracts buyers and maximizes your return. While online valuation tools offer a starting point, the insights of a professional realtor are essential for navigating the complexities of the real estate market and achieving a successful sale. If you’re ready to sell your home, get connected with a Redfin Real Estate Agent and see which selling approach they offer.

    Frequently asked questions: 

    As a realtor, how do I explain the limitations of online home valuation tools to my clients?

    While online tools can offer an estimate, they often miss the necessary understanding of local market conditions and individual home features that only a realtor can provide. These tools don’t account for recent upgrades, unique property characteristics, or the specific dynamics of your neighborhood, which are important for an accurate valuation.

    How should clients price their home to leave room for negotiation?

    Pricing too high can deter potential buyers, leading to your client’s home sitting on the market, which can then make buyers wonder if there’s something wrong with the property. It’s often better to price competitively from the start.

    What is the recommended timeframe for reviewing a home’s pricing strategy?

    As a realtor, you will continuously monitor market activity and buyer interest. If your client’s home isn’t receiving much attention or offers after a few weeks, it’s a clear signal that the price should be re-evaluated based on the latest market data.

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  • Inspection for Informational Purposes Only: What It Means For Buyers and Sellers

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    The clause “inspection for informational purposes only” became popular in the competitive housing market during the pandemic. You may have seen it in an offer, or even used it yourself. While the term sounds simple, buyers and sellers don’t always agree on what it means once the purchase and sale agreement is signed.

    An inspection for informational purposes only means the home inspection is for the buyer’s knowledge only, and won’t be used to negotiate over every minor issue. But the rules can vary by state, and misunderstandings can lead to conflicts during the sale.

    Here’s what you need to know to navigate negotiations and set realistic expectations, whether you’re buying a home in Boston, MA, or selling in Los Angeles, CA.

    What does “inspection for informational purposes only” mean?

    An inspection for informational purposes only, sometimes called an “informational inspection” or “info-only inspection”, is a clause that allows buyers to complete a home inspection while:

    • Agreeing not to request repairs or price reductions: Sometimes additional terms are added in case major work surfaces, like not requesting or negotiating repairs under $5,000.
    • Releasing the seller from any obligation to fix issues: While sellers aren’t (usually) required to fix anything that comes up during the inspection, an informational inspection reduces the risk of negotiations or unexpected costs for the seller.
    • Retaining the buyer’s right to walk away (depending on the contract): If the offer is accepted as an information only inspection, and maintains the inspection contingency, buyers can still walk away after the inspection. If an inspection for informational purposes only is combined with a waived inspection contingency, the buyer is likely locked into the contract.

    The original purpose of the clause allowed for the buyer to gain knowledge about a home’s condition without creating additional negotiation hurdles for the seller, an especially powerful move when combined with a waived inspection contingency in a competitive market. But depending on where the transaction is taking place, the phrase can hold different meanings.

    What this looks like in practice

    You’ve found your dream home in Kansas City, MO’s hot housing market. To make a strong offer, you waive the inspection contingency but retain the right to an informational inspection—showing the seller you’re serious and unlikely to back out.

    The inspection report uncovers $15,000 worth of electrical and plumbing updates. Normally, a buyer might try to negotiate with the seller to cover some of these costs, but with this type of offer in a competitive market, you’re committed or risk losing your earnest money. You move forward toward closing, knowing you had $20,000 budgeted for unexpected repairs.

    What an inspection for informational purposes means in your state

    Here’s where things can get murky: an inspection for informational purposes only doesn’t hold the same weight everywhere. Real estate contracts are written differently in every state, and the local market culture also plays a big role. While the phrase is common across the country, each state’s standard real estate forms handle it a little differently.

    • Massachusetts – Common in competitive Boston markets. Buyers usually won’t request repairs, but most contracts still allow withdrawal for major issues. “Informational only” doesn’t guarantee the buyer will stay.
    • New Jersey – Buyers may have an inspection contingency period. Even with an informational inspection, they can usually walk away if serious defects are found. Fewer repair requests, but no total certainty for sellers.
    • Delaware – Contracts prevent repair or credit requests, but buyers can terminate if uncomfortable with findings. Balances seller stability with buyer protection.
    • Virginia – Informational inspections often prohibit renegotiation, though buyers may retain a right to terminate for major issues. Legal guidance is recommended.
    • California – Buyer-protective agreements mean buyers can often cancel during the inspection period, even with an informational-only clause. Sellers should note it may carry less weight.
    • Illinois – Common in Chicago-area competitive offers. Buyers typically cannot demand repairs, but attorney review periods may allow withdrawal. Clarifying timelines is key.
    • Texas – The TREC contract allows buyers to terminate for nearly any reason during the option period, so informational inspections are less restrictive.
    • Florida – “As-is with right to inspect” provisions let buyers inspect without obligating repairs. Buyers can still cancel during the inspection period.

    Pros and cons of an informational inspection

    When possible, an inspection paired with a home inspection contingency is the gold standard for buyers. But when you need your offer to stand out, an inspection for informational purposes only can be what pushes your offer to the top — and convince sellers that you are serious about the home.

    Benefits for buyers

    • Instead of completely waiving the inspection, you still get knowledge of the home’s condition before buying. This reduces the risk of going in blind to a home purchase.
    • Depending on your state and contract, it might still be possible to walk away from a home if the inspection report reveals issues.

    Benefits for sellers

    • An info-only inspection reduces the risk of buyers coming back to negotiate. Less negotiation usually means a faster path to closing.
    • In a hot market, buyers with this clause are likely to be more serious about the deal.

    Risks for buyers

    • You lose your negotiation power — and it’s likely sellers have back-up offers waiting if you don’t like what was found on the inspection report.
    • If you also waived the inspection contingency, you could inherit expensive repairs.
    • The contract could remove your right to walk away after the inspection and lose your earnest money.

    Risks for sellers

    • Buyers could still try to negotiate if big repairs, like foundation problems, are uncovered.
    • If the buyer does walk away based on what was found in the report, any major defects might need to be disclosed to the next buyer.
    • Depending on the contract terms, the buyer might still be able to walk away without consequence after the inspection.

    Bottom line

    While an inspection for informational purposes has its advantages, both sides should understand the trade-offs of this approach. Buyers will come in with a stronger offer but have less leverage to negotiate. For sellers, it can mean a cleaner transaction, but it’s still not a guarantee the deal will go through. Understanding what an inspection for informational purposes only means can help set the right expectations — ideally creating a smoother path to closing for both parties.

    FAQs about inspection for informational purposes only

    Can I still cancel the contract after an informational inspection?
    It depends on your state and contract. In many states, yes, you can cancel, but you can’t renegotiate. But if an informational inspection is combined with a waived inspection contingency, it will be more difficult to walk away without losing your earnest money.

    Is an informational inspection the same as waiving an inspection?
    No. Waiving an inspection means no inspection at all. An informational inspection means you get a home inspection but agree not to request repairs or negotiate once you get the report.

    Do sellers have to disclose issues found in an informational inspection?
    Yes, in many states. Once a seller becomes aware of a major defect, they may be legally obligated to disclose it to future buyers.

    Should buyers always get at least an informational inspection?
    Yes. Even if you’re competing in a hot market, knowledge of a home’s condition is critical before committing to close.

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    Ashley Cotter

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  • Sales Comparison Approach: A Guide for Home Sellers

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    One of the most widely used methods real estate professionals use to determine the value of a home is the sales comparison approach. The sales comparison approach, also known as the market data approach, estimates a property’s value by comparing it to similar properties that have recently sold in the same area. 

    Think of it like this: if you want to know what your car is worth, you’d look at what similar cars of the same make and model have recently sold for. This technique helps both buyers and sellers understand a property’s true market worth. This Redfin real estate guide goes deeper into the sales comparison approach and how you can use it to your advantage as a seller.

    What is a sales comparison approach?

    The sales comparison approach is a real estate appraisal method that determines a home’s value by comparing it to similar properties’ sales data. Real estate professionals analyze listing and sales prices, market conditions, and the home itself to find its fair market value. A comparative market analysis, best performed by an agent or appraiser, helps understand price trends.

    An overview of how the sales comparison approach to valuing homes works

    • The sales comparison approach is a key component of a comparative market analysis used by real estate agents.
    • Agents identify recently sold properties that share as many similar attributes as possible with the subject property.
    • Real estate agents possess expertise in recognizing desired buyer attributes and their value contribution to a home.
    • Agents are adept at assessing a home’s condition and comparing it to recently sold homes.

    Find real estate comparables

    When using the sales comparison approach, an agent considers recent sales of homes with similar characteristics to the home being priced. Key factors include:

    • Location and neighborhood: Homes in the same neighborhood or subdivision to account for local market factors and school districts.
    • Home style and features: Looking for homes with similar styles, number of bedrooms and bathrooms, and other features.
    • Construction quality: Comparing homes with similar construction quality for an accurate comparison.
    • Age and condition: Finding homes of similar age and condition.
    • Square footage and lot size: Matching homes with similar house and lot sizes.
    • Recently sold area listings: Using the most recent sales data possible for accuracy.

    Make adjustments to comparables

    No matter how many comps you have to choose from, you’ll never find a house that’s identical to yours. As a result, even when using the most comparable home, you’ll still probably have to make some adjustments to the prices on the comps you find.

    Here are some factors you may use to make adjustments to comparable home values:

    • Market conditions: The real estate market can change quickly. Even if a comparable home just sold a month ago, the market could have changed since then, meaning you’ll have to make adjustments to the comparables to account for that.
    • Qualities and features: No two homes are identical. Even in two homes with similar characteristics, one could be worth more. Maybe one home has recently had its kitchen renovated or has a more on-trend style.
    • Location characteristics: Even two homes in the same neighborhood could have different values based on their location. Is one on a busy street while the other is on a quiet cul-de-sac? Is one closer to certain amenities?

    Analyze weight adjustments

    Once your real estate agent has completed the comparative market analysis, you’ll use a weighted average of the comparable homes to determine the fair market value of your home. When using a weighted approach, you’ll give the most weight to the homes that are most similar to your home, while homes that need more adjustments will have less weight.

    Sales comparison approach vs. cost approach

    Sales comparison approach:

    • Ideal for pricing homes in areas with abundant recent sales data (suburbs, established city neighborhoods).
    • Helps determine market value.
    • Less useful for unique properties, remote areas, or investment homes due to limited data.

    Cost approach:

    • An alternative when the sales comparison approach is less useful.
    • Estimates a home’s value based on rebuilding costs (land, structures, improvements, depreciation).
    • Has two types:
      • Reproduction cost: creating an exact duplicate with original materials.
      • Replacement cost: assessing how much a similar house would cost using modern materials and techniques

    The bottom line

    The sales comparison approach is one of the most popular methods for pricing homes. Whether you’re getting ready to buy or sell a home – or both – it’s important to understand how this strategy plays into the price you’ll pay for a home or how much you can get for your current home.

    If you’re getting ready to sell your home and need help setting an asking price, get connected with a Redfin Real Estate Agent and see which selling approach they offer.

    Frequently asked questions:

    When should you use the sales comparison approach?

    The sales comparison approach is best when you live in a large neighborhood or subdivision where there are plenty of comparable homes. If you live in a rural area or have a unique home, the sales comparison approach may not work.

    What is a “comparable” property?

    A comparable property is a recently sold property that is similar in characteristics to the property being appraised, located in the same or a very similar market.

    What is one weakness of the sales comparison approach?

    The biggest weakness of the sales comparison approach is that no two homes are identical. No matter how many similar homes you find, there will still be differences that can make pricing your home a challenge.

    Is the sales comparison approach always accurate?

    While highly reliable, its accuracy depends on the availability of truly comparable sales and the appraiser’s expertise in making appropriate adjustments.

    Can I use the sales comparison approach myself to estimate a home’s value?

    While you can certainly research recent sales data, a professional appraiser has the expertise to select the most relevant comparables and make precise, defensible adjustments.

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    Pablo Alvarez

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  • Who Pays the Real Estate Agent Commission?

    Who Pays the Real Estate Agent Commission?

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    Are you buying or selling a home? Then you might be wondering: “Who pays the real estate agent?” Traditionally, this cost has been shouldered by the seller, but recent changes have brought new dynamics into play. 

    The National Association of Realtors (NAR) and Multiple Listing Service (MLS) have implemented new rules about how real estate agents communicate about real estate fees. These changes went into effect on August 17th, 2024, and are intended to provide greater transparency and competition around fees. 

    In this Redfin article, you’ll learn everything you need to know about who pays the real estate agent, agent commissions, and the recent changes affecting them. 

    What is a real estate commission?

    A real estate commission is a payment the homebuyer or seller makes to their agent(s) for their services in helping them purchase or sell a home. The commission is often a percentage of the final home sale price and is exchanged during the final transaction at closing. 

    Who pays the real estate agent?

    Sellers have historically paid both the buyer and seller’s agent fees from the proceeds of the sale. But as of August 17, 2024, buyers will now agree to their agent’s fee in writing before touring. Buyers can still ask the seller to cover the buyer’s agent fee when they make an offer. 

    Because of this change, the amount the seller has to pay a buyer’s agent varies from buyer to buyer. Redfin expects that sellers will continue to cover the buyer’s agent commission fee in many transactions, but increasingly, these fees will be negotiated as part of the offer. 

    Here are two options for how a seller might navigate the new commission process: 

    • The seller can leave it open-ended and ask buyers to make their best offers, which may include buyer agent compensation, and then negotiate from there.
    • Sellers can proactively offer a commission or a concession that the buyer could use to pay their agent as part of their home’s marketing strategy. They can still communicate this to buyers and agents when a buyer’s agent contacts the listing agent to schedule a showing.

    Why would a seller pay the buyer’s agent commission?

    Whether to offer any buyer agent commission, or how much, is part of an overall marketing strategy geared towards attracting buyers and achieving the sellers’ goals. 

    Instead of authorizing their agent to advertise a selling office commission (which must now be off the MLS in most markets), a seller may choose to offer the buyer a concession that the buyer can choose to use as they see fit. Or, they could instruct their agent to tell the buyer that they’re open to offers. That then puts the ball in the buyer’s court to decide if they want to request any concessions from the seller, or if they want to pay their agent directly.

    How did the NAR settlement affect agent commissions?

    Prior to the NAR settlement, the commission amount that the seller was willing to provide was advertised in the MLS, so that buyer agents would know in advance what a seller was offering to them if they brought a buyer for that listing. Some MLSs required that the listing make an offer of commission to buyers’ agents. Commissions were always negotiable, but were rarely negotiated in practice. Following the settlement, we’re seeing an increase in how often commissions are negotiated. 

    The NAR settlement also established rules designed to help make real estate fees more transparent and competitive. For example, agents must now provide a written agreement to homebuyers that explains their fees before touring. These agreements must also include a statement that all commissions are fully negotiable. 

    Some brokerages now require a full buyer agency agreement that requires the customer to commit to that agent exclusively before touring. Redfin does not. Redfin believes that we should earn a customer’s business. This is why Redfin discloses our fee upfront, but does not require a customer to exclusively commit to us in order to tour a home. 

    Unless otherwise specified by state law, a buyer doesn’t need to sign an exclusive, binding agency agreement to tour a home. 

    Can you negotiate real estate agent commissions?

    Yes, you can negotiate real estate agent commissions. Commissions are not set by law and are fully negotiable. The commission rates many brokerages charge often vary from area to area, and there are no laws or industry rules that set commission rates.

    How is Redfin different when it comes to commissions? 

    At Redfin, we’ve always believed that consumers should get the best deal. That’s why we charge sellers a listing fee as low as 1%.* 

    Our fees when serving buyers vary by market, but are competitive because we know they could make the difference in your winning or losing an offer. All things equal, a seller will prioritize the offer that is asking them to pay a lower buyer agent fee. 

    We also offer additional savings for buyers who make a commitment to hire us after the first tour. With our Sign & Save program, if you commit to hiring your Redfin agent before the second tour, we’ll reduce our fee by 0.25%. We earn customers’ business by providing the best service and value.

    Final thoughts

    The real estate commission landscape has shifted, offering more transparency and flexibility for buyers and sellers – goals that Redfin has always supported. Whether you’re searching for your dream home or looking to relocate, understanding these new rules can help you make smarter decisions and potentially save money in the process. 

    You can learn more about the NAR settlement here, and how Redfin has embraced this change and always championed better deals for the customer here. You can also connect with a Redfin agent to learn everything you need to know – regardless if you’re buying or selling. 

    The NAR settlement primarily applies to listings on an MLS, and MLS rules may vary. Rules regarding listings not on an MLS also vary widely from state to state. Talk to your agent to learn more. 

    *Listing fee subject to change, minimums apply. Any buyer’s agent fee the seller chooses to cover not included. Listing fee increased by 1% of sale price if buyer is unrepresented. Sell for a 1% listing fee only if you also buy with Redfin within 365 days of closing on your Redfin listing. We will charge a 1.5% listing fee, then send you a check for the 0.5% difference after you buy your next home with us. Learn more here.

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    Jamie Forbes

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  • Real Estate Commission Changes: What You Need to Know

    Real Estate Commission Changes: What You Need to Know

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    There are important changes happening in the real estate industry this month. The National Association of Realtors and multiple listing service (MLS) have implemented new rules about how real estate agents communicate about real estate fees. The changes provide greater transparency and competition around fees—goals that Redfin has always supported. 

    We know this can be confusing, but Redfin agents are prepared to answer any questions you have and expertly guide you through your buying and selling journey. 

    So, what is changing exactly?

    It has been customary in most transactions for the home seller to pay a commission to both their agent (the listing agent) and the agent who represents the buyer (the buyer’s agent). While it has always been the seller’s choice to decide whether and how much compensation to offer the buyer’s agent, the process around it has changed in two main ways:

    1. Disclosure of buyer’s agent fees: A buyer will now need to agree to their agent’s fees before touring homes. This sets the maximum amount that your buyer agent will be paid when you purchase a home. 
    2. Advertising of buyer’s agent fee: Offers of buyer agent compensation are being removed from many MLSs, the databases agents use to share and market listings. A seller can still pay the buyer’s agent, but they cannot advertise any offers of compensation in the MLS unless expressly allowed by local rules.  As a result, buyer’s agent fees will increasingly be negotiated as part of the offer.

    What does this mean for sellers?

    Sellers will still have conversations with their listing agents about any compensation they would like to offer to the buyer’s agent. We expect that in many cases, buyers will continue to ask sellers to help cover the buyer’s agent fee as part of their offer. Sellers will evaluate offers and negotiate, like they would with any other terms. 

    What does this mean for buyers?

    As a buyer, you will have an upfront conversation to learn what your agent will charge. Your agent will ask you to sign an agreement about their fee before touring homes.  You can still ask the seller to cover your agent’s fee as part of your offer. Depending on how you structure your offer, the seller could agree to compensate your agent directly or could offer closing concessions that you could allocate to pay your agent at closing. 

    As a buyer, why do I need to sign an agreement so early in the process? I just want to tour a home and I’m not ready to commit to paying an agent.

    The new industry-wide rules require a written agreement that explains the agent’s fees before touring. Unless otherwise specified by state law, a buyer doesn’t need to sign an exclusive, binding agency agreement to tour a home. Different brokerages have different approaches and policies. Redfin’s approach is transparent and gives buyers flexibility. 

    Is Redfin requiring a buyer agency agreement to tour?

    Unless your state has other requirements, Redfin is adding a simple fee agreement for the buyer to sign when you request a tour with a Redfin agent that discloses the fee we would expect to collect at closing. Many sellers will cover this fee for you at closing. 

    This fee agreement does not lock you in to working with a Redfin agent. Once you’ve had a chance to meet your agent in person, your agent will ask you to commit to working with Redfin. Buyers who commit to working with Redfin before the second tour will get a discount of 0.25% off our fee. 

    What are Redfin’s fees for buyer services?

    Redfin’s buyer fees vary by market. We’ve set our pricing to give our buyers a competitive edge, offering a discount of 0.25% off our fee if you commit to Redfin before the second tour. By reducing our fee by 0.25%, we can make your offer more attractive to a seller. Just like the offer price and contingencies, a seller will compare how much in buyer agent fees each offer is requesting and factor that into their decision. 

    What if the seller doesn’t agree to pay my agent? Am I responsible for paying my agent out of pocket?

    Many buyers are using all of their financial resources for their downpayment and don’t have extra cash to pay agent fees. So far, most sellers understand this and are often willing to cover the buyer’s agent fee from the proceeds of their sale. If the seller doesn’t agree to pay your agent or only agrees to pay a portion of the buyer’s agent fee, you can amend your offer, agree to pay your agent directly at closing, or walk away. In any case, before signing a contract to purchase a home, you’ll be aware of the associated costs so that you can make an informed decision. 

    It’s important to have a good relationship with your mortgage lender, who can help you structure your offer in a way that fits your financial situation. Redfin’s mortgage partner, Bay Equity, has loan officers at the ready to guide you through this process.*

    When I sell my home, do I have to pay a buyer agent commission? Should I offer one?

    A seller has always had the ability to decide how much, if any, compensation to pay the buyer’s agent. As a seller, you have options: 

    • You can leave it open-ended and ask buyers to make their best offers, which may include buyer agent compensation, and then negotiate from there.
    • Or, you can proactively offer a commission or a concession that the buyer could use to pay their agent as part of your home’s marketing strategy. This can still be communicated to buyers and agents when a buyer’s agent contacts the listing agent to schedule a showing. Whether or not to offer a commission, and how much, can be dependent on various factors your Redfin agent can help you with.

    How do I know what is a fair price for a buyer’s agent?

    Buying a home is a huge commitment; you should focus on finding the best agent at the best rate. Redfin agents have significant experience and we publish their sales and customer reviews online so you can see for yourself. The average Redfin agent sold more than three times the number of homes as the typical agent at other major brokerages. And we’ve set our prices to be as competitive as possible. Connect with an agent to learn more.

    *Bay Equity Home Loans is affiliated with Redfin. You don’t have to work with a Redfin Agent to use Bay Equity’s services. For additional information, please read our Affiliated Business Disclosure.

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    Jamie Forbes

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