Shedding Light on Buyer's Agent Commissions - Redfin Real Estate News

Shedding Light on Buyer’s Agent Commissions

Updated on October 5th, 2020

Redfin will now publish the commission offered to the buyer’s agent for homes that a Redfin agent is hired to sell on We believe displaying the commission will help consumers better understand the costs and incentives in the real estate transaction. The commission will appear in the property details section for Redfin-listed homes on 

“Across the country, the Multiple Listing Services that agents use to share listing data are now considering whether to follow the lead of the Seattle-area MLS and let brokerage websites publish the commission each listing pays a buyer’s agent,” said Redfin CEO Glenn Kelman. “But with more than 20,000 homes listed for sale each year by a Redfin agent, Redfin doesn’t have to wait for the MLS to give us permission to show the commissions offered to buyers’ agents on our own listings. Today, for most of the homes that Redfin has listed for sale ourselves, visitors can now see exactly how much of a commission the homeowner is offering the agent representing a buyer of that listing.”

“This could lead home-buyers to be as careful about commissions as sellers already are,” Kelman continued. “We’ve spent more than a decade trying to compete not just on the quality of our service to homebuyers, but on price, by refunding part of our commission back to the homebuyer. But the refund hasn’t been well understood by buyers, who have always assumed the buyer’s agent is free, even though buyer’s agent fee is often baked into the price the buyer paid for the house. As a result, over the past five years Redfin has shifted most of our technology-driven commission savings to the seller, not the buyer. Now, as buyers see more and more listings where the commission paid to the buyer’s agent is publicly displayed, we expect the marketplace for buyers’ agents to become more efficient, with buyers comparing agents’ fees just as sellers already do.”

Survey: Buyers Don’t Understand How Agents Are Paid

More than half of recent homebuyers don’t fully understand how their agent was paid, according to a recent survey commissioned by Redfin. Of people who successfully bought a home in the last year, 38 percent had “some idea how much money my agent made on my transaction, how the amount was determined and who paid it,” while 13 percent responded that they had “no idea.” The survey was fielded in June and included nearly 1,000 respondents who successfully bought a home in the last year.


Buyers who also had recent home-selling experience were more confident in their understanding of how their agent was compensated. Redfin segmented the results by comparing buyers who only bought to buyers who also sold or attempted to sell a home in the last year. Of the buyers who solely purchased a home, 61 percent lacked certainty about how their agent was paid. That number was 44 percent for buyers who also sold a home in the last year. 

It makes sense that buyers who recently sold a home have a better grasp on real estate commissions, given sellers have more homebuying experience, typically discuss the commission with their agent, and pay these costs more directly. Buyers are less likely to have discussions about compensation with their agent, which makes them less informed and less likely to negotiate. 

When a homebuyer purchases with a Redfin agent, Redfin gives the buyer a portion of the commission it earns back to the buyer in the form of refund at closing. The average Redfin Refund is $1,700. The Redfin Refund is only available where allowed by law. Many buyers are unaware they have the ability to negotiate with their agent or that they have choices in business model and service level. In addition to full-service brokerages, there are hourly rate or fee for service options. In addition, buyers can elect to make an offer and negotiate on their own behalf. More transparent commissions would also help a buyer to see if her agent is steering her to properties that would be more lucrative for the agent or away from less lucrative properties.

Alina Ptaszynski

Alina Ptaszynski

Alina is on the communications and PR team at Redfin. She helps consumers and the media understand what's going on in the housing market, the real estate industry and inside Redfin.

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