Chipping Away At Realtors' Six Percent

Lesley Stahl:

"We've refunded over $3 million in commissions to our customers," Kelman says. "When we’re the buyer’s agent, we take our commission, which is usually three percent. We keep one-third of it. And we give two-thirds of it back to the buyer. So, on a $1 million house, we would get $30,000 normally. But we only keep $10,000 and give $20,000 back to the buyer."

How is he making money?

"The average agent processes eight deals a year. We have an agent that can do that every week," Kelman explains.

"Are you spinning me?" Stahl asks.

"I mean, seriously," Kelman replies.

There's no way to independently check the number of deals his agents close in a week, but it is clear that they do make it easy for their customers who can sit home at night in their pajamas and click on the Redfin webpage to read critiques of houses in their price range, see what comparable homes in a given neighborhood have sold for and to even tour a house they might be interested in.

About this Entry

This page contains a single entry by Jim Zellmer published on May 13, 2007 10:18 PM.

Growing support for flat broker fees was the previous entry in this blog.

Fun With Housing Charts is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.