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Sign into your accountLet's Start Tipping Brokers
March 31 2019
In the past, we've talked about the compensation model for brokers (here and here). As Redfin continues to grow, the fixed-fee/discount model is continually positioned as a superior one. There's REX and its $2,000 fee, Homie and its $1500 fee, and a slew of others who are hitching their wagon to the trend that fixed-fee aligns best with the incentives of the client: why pay more simply because you spend more?
The issue, as is well documented, is that there is often a stigma with 'discount' that implies lack of quality services provided when compared to the traditional brokerage model. What drives consumers crazy with the latter is the fact the agent gets paid more the more you spend, not necessarily due to better service. Is there a third structure that would optimize the alignment of incentives? Yes: tipping.