Redfin’s conflict of interest

Redfin rebates a portion of its commission
back to home buyers in exchange for buyers doing most of the research
themselves, and on the sell-side offers to list homes for a flat rate.
The company claims to have saved home buyers nearly $6 million in
commissions since its last round of financing in May 2006.

Critics within the industry say that this type of business model in
which consumers do much of the work themselves in exchange for a
discount comes at the expense of the agent working the opposite side of
the deal. In addition to Redfin, many companies have begun offering
discounted commissions to consumers who prefer to handle some aspects
of the sale without the help of an agent.

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