What is Redfin Now?
Redfin Now is an “iBuyer” operated by the popular real estate website Redfin. The “i” in iBuyer stands for either “Internet” or “instant” because iBuyers are online companies that provide a quick cash offer to buy your home. The iBuyer then resells the property for a profit.
When you sell to an iBuyer, you don’t have to hope you find a buyer or wait for one to get mortgage approval. You’ll just have to decide if you want to sell it at the price the iBuyer offers. If you do, you can move forward with selling your property quickly for cash.
Redfin Now isn’t the only iBuyer out there. And it’s not necessarily the most affordable one. But it will purchase your home fast and make the selling process much more streamlined than if you sold to a traditional buyer.
This Redfin Now review will tell you all you need to know about how Redfin Now cash offers work so you can decide if selling your home to this iBuyer is the best choice for you.
- How does Redfin Now work?
- What markets does Redfin Now serve?
- What are the typical Redfin Now fees?
- Pros and Cons of selling with Redfin Now
- Redfin Now Reviews
How does Redfin Now work?
In select locations across the United States, Redfin is willing to purchase homes for cash.
If you live in one of the Redfin Now markets, you’ll get an offer to buy your property within days and can complete the transaction within 30 days of accepting it. You’ll skip the hassle associated with a traditional home sale – but you’ll pay a high price for the convenience because Redfin’s offer will be below market value and you’ll owe the company a service fee.
If you’re interested in selling your home to Redfin Now, here’s how the process works:
- You’ll enter your home address on the Redfin Now website and click “Get My Offer.”
- You’ll receive an all-cash offer within a few days of submitting your request. Redfin uses an automated valuation model that takes many data points into account to determine what your home is worth.
- If you accept your offer, you’ll sign the form Redfin sends and choose when to close the deal. You’ll need to pick a closing date within 10 to 30 days from the time you sign.
- Redfin will schedule inspections to determine if your home is structurally sound. These could include a general home inspection, as well as specialized ones as needed.
- You’ll receive an inspection report. This will detail any problems with the home as well as the estimated cost of repairs. Repair expenses are deducted from the offer price but you also have the option to cancel the sale if you disagree with the estimates.
- You’ll close the deal on your chosen date. Redfin will pay cash for your home. The funds will be paid to your mortgage lender and you’ll receive a check for any outstanding balance after your mortgage and real estate closing costs are paid.
- Redfin will resell your home, making a profit in the process.
What markets does Redfin Now serve?
Redfin Now is only available in very limited areas. The Redfin Now markets include select geographic locations within California, Colorado, and Texas – although it has indicated it plans to expand to additional markets in the future.
Currently, you will only be able to sell your property to Redfin Now if it is located in one of these areas.
|Palm Springs||San Antonio|
What are the typical Redfin Now fees?
Redfin now charges a service fee between 6% and 12%. That’s expensive, and can eat into your profits much more than other alternatives. For example, when you list with Clever, you’ll pay just $3,000 or 1% of the sale price to a full-service real estate agent. Even when combined with required commission you generally must pay the agent representing your buyer, you’re saving substantially compared with Redfin. You can visit Clever today to learn more about this affordable option for selling your home.
Redfin, unfortunately, does not disclose the service fee by market so it can be difficult to know whether you’ll pay at the upper or lower end of the range. However, the company indicates it considers many factors in setting your fee. These include the risks associated with reselling your home as well the expenses it may have to pay until the home is resold.
Redfin wants to make sure it can resell the home quickly, so it considers comparable sales and home buying trends. If you’re in a hot market where properties tend to sell quickly, the service fees should be lower.
The costs associated with owning your home until Redfin finds a new buyer will also impact whether you pay at the high or low end of the 6% to 12% service fee. Some of the expenses Redfin assesses when calculating your fee will include:
- Homeowner’s association dues
- Potential maintenance
- Home insurance
Redfin Now fees and commissions: How do they stack up?
Even a 6% service fee is expensive, especially as Redfin tends to purchase homes in areas with high median housing values. In Los Angeles County, for example, the median home value was $710,000 in September of 2020. To sell a median price home to Redfin Now, you’d be looking at a service fee of $42,600 at the low end.
Still, the fee is comparable to other iBuyers that provide instant offers. For example:
- Fees for Zillow’s iBuyer program, Zillow Offers, include 6% selling costs and a service fee averaging 2.5%
- Offerpad, another iBuyer, charges a service fee between 6% and 10%, with the average seller paying 7%
Some of Redfin Now’s fees are offset by the fact you don’t have to pay traditional real estate commission. That’s usually 6% split evenly between the buyer’s and seller’s agent. However, sellers have the option to save on this commission by choosing a discount realtor while Redfin Now’s service fee is not negotiable.
Other costs of using Redfin Now
The costs of using Redfin Now go beyond the service fee.
You will also have to pay for any necessary repairs, as well as routine closing costs. You would likely incur these expenses in most traditional real estate transactions as well, although you’d again have more opportunity to negotiate with a regular buyer than with an iBuyer.
iBuyers also generally offer below market value on a home, as their goal is to make a profit by reselling it. In fact, Redfin acknowledges that they “charge a premium for the convenience, certainty, and control that comes with your cash offer.”
Pros and Cons of selling with Redfin Now
There are significant advantages to selling your property to Redfin Now, but there are also disadvantages to think about as well before deciding if you want to work with this iBuyer.
Pros of selling with Redfin Now
Here are the biggest benefits of selling to Redfin Now:
- Speed: In October of 2020, the median time homes were on the market was 53 days, according to Realtor.com. With Redfin Now, you can get an offer within a few days of making a request and can then close within 10 to 30 days. Being able to sell your property more quickly could be a major advantage.
- Convenience: Preparing your home for sale can involve staging the property, cleaning up for open houses, and having dozens of potential buyers visit your home. You can skip all that with Redfin now and get an offer sight unseen.
- Certainty: You don’t have to wait and hope a buyer will want to purchase your property. You’ll know within days if you’re eligible for a Redfin Now offer and what amount the iBuyer is willing to pay. You also won’t have to worry about your buyer’s financing falling through.
- Flexibility: When you sell to a traditional buyer, you have to agree on a closing schedule that works for both of you. With Redfin Now, you choose the closing date so you can work on your own schedule.
Pros of selling with Redfin Now
Here are some of the biggest disadvantages:
- High fees: You’ll have to pay the Redfin Now service fee, which is generally going to be more expensive than traditional real estate commission. You will also have to pay for closing costs.
- Offers are below market value: Redfin wouldn’t be able to make a profit if they paid exactly what your home is worth, so expect their offer to be approximately 5% to 15% below market value.
- No option to negotiate: With a traditional buyer, issues such as the purchase price, repairs you’ll pay for, and even who pays closing costs are all up for negotiation. With an iBuyer, the offer is take-it-or-leave it.
- Limited availability: Unless you live in one of the few areas that Redfin Now operates, you won’t be able to sell your home this way.
- Poor reviews: Redfin Now has been the subject of customer complaints, including some sellers indicating they experienced substantial drops in their offer price due to errors in the initial valuation. Redfin as a company also receives a B- rating from the Better Business Bureau, although many BBB complaints focus on its broader business services rather than its iBuyer program.
If the high fees and poor reviews turn you off, Clever can help you list your home for an affordable flat fee with a full service agent. Contact Clever today to learn more about your options.
Redfin Now Reviews
While the pros and cons of Redfin Now provide some insight into the company’s services, they’re no substitute for seeing what real people are saying about working with the iBuyer. Here, let’s take a close look at some Redfin Now reviews to better understand the customer experience.
The good news: Redfin Now Positive Reviews
The below review demonstrates many of the pros mentioned above. The seller indicated that the process was convenient and they received the money in their account quickly.
Redfin Now complaints
While some sellers have had a positive experience, others definitely haven’t. In fact, these reviews demonstrate some of the disadvantages mentioned above. These two sellers both complained about the high fees and the low offers they received for their property.
And this seller had a problem with Redfin Now’s repair requests.
Remember, in a traditional real estate transaction, you can negotiate with any would-be buyer about repairs you are willing to pay for or can choose to sell your property “as is” and not make any repairs or offer any discounts if problems turn up during an inspection. But when you sell to Redfin Now, you’ll have no leverage — you’ll either have to follow their requirements regarding repairs or walk away from the deal.
The bottom line is, when you work with Redfin Now, you give up your negotiating ability and pass up the chance to get top-dollar for your property in exchange for being able to sell your property quickly for cash. If you don’t want to make this trade-off, contact Clever today to get matched with a full-service agent who will charge an affordable fee to help you get the best price possible for your home.
We Buy Ugly Houses Review: We Buy Ugly Houses is another iBuyer that provides an all cash offer for your property. But they tend to focus on properties that are in distress or, as the name suggests “ugly.” Our review tells you everything you need to know about how We Buy Ugly Houses works, the pros and cons of selling your house to them, and how users have fared when dealing with the company.
Redfin Reviews and Competitors: Redfin allows you to sell your home for a reduced commission or to get a portion of your buyer’s commission back when you purchase a home through one of its agents. You can also search for properties on Redfin or use its iBuyer service. Find out the pros and cons of working with Redfin and learn about the experiences of buyers and sellers who’ve used the popular listing platform.
What Companies Offer the Lowest Real Estate Commission Fees: The days of the required 6% real estate commissions are over. There are a number of companies now that connect you with agents that will sell your home for far less. Check out this review of eight services that help you sell your home for less than the standard commission so you can keep more money in your pocket.