The business model of selling and buying homes remains mostly unchanged even as digital technology has transformed how people search for homes.

But Redfin, a tech-focused real estate startup, is challenging the status quo by expanding its one percent listing fee program into the Hudson Valley housing market, including Westchester and Rockland counties.

In a traditional setting, sellers are typically responsible for a six percent commission on the home's sale price, which is split between the seller's and the buyer's brokers.

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By reducing the seller's broker share to one percent from three percent, Redfin's initiative lowers the total fee to just four percent.

For example, if a house is sold at the region's popular price point of $500,000, the seller would commonly pay $30,000 in total commission under the traditional setting, and $15,000 would go to the listing broker.

When the home is listed by Redfin, however, the total fee would be down to $20,000 because Redfin gets only $5,000 — or one percent of the sale price — and the rest, $15,000, goes to the buyer's broker, resulting in $10,000 of savings for the seller. (Caveat: Redfin sets minimum listing fees for each market. In the Hudson Valley region, the minimum is $4,500.)

The lower listing commission better reflects the current market where bidding wars are commonplace, according to Redfin CEO Glenn Kelman.

"Especially in today’s hot market, the most value-conscious customer is the one selling, not buying, a home," he said in a statement as announcing the program.

Paradigm shift

For the past few years, Redfin has been testing the one percent listing fee program in several markets in the nation, including Washington, D.C., Baltimore, Chicago, Denver, San Diego, Seattle and northern Virginia.

After seeing positive results, the company this fall added 18 more markets to the mix, including the Hudson Valley region.

The lower fee structure does not directly affect Redfin agents' compensation because, unlike traditional agents who make money through commissions, they are salaried.

Ken Wile, associate broker with Redfin based in Westchester, says the company's model works for him and his customers.

"Our pay is based on our customer satisfaction surveys, which is a complete paradigm shift (in the real estate industry)," said Wile, who was previously associated with Houlihan Lawrence.

"From day one, our motivation is to help our customers. I'm not saying everyone else doesn't do that, but our pay motivation is aligned with our customer’s satisfaction, which is a really cool thing," Wile said. "Our customers really like it, and we get a lot of referrals based on that."

Redfin's popular website, which includes its signature map-based real estate search, is also helping its agents get more leads.

When Lisa Walden of New Rochelle started contemplating selling her house to downsize, she first went online to learn about the area's housing market. She found Redfin's website "easy to navigate," she said.

"So when it came time for me to sell the house, I was like, let me look at the (Redfin) agents," Walden recalled.

Walden put her three-bedroom-house on Whitfield Terrance on the market this fall with the assistance of Wile. She has had many showings and offers, including a recent offer that she'd be willing to accept, she said.

Skeptics

Local real estate experts are skeptical about the tech-driven brokerage firm's approach.

"At the end of the day, people are willing to pay fees for the right service" provided by an agent armed with deep local market knowledge, said Emi Cacace, a Westchester-based real estate broker and instructor who teaches classes at the Fordham Real Estate Institute.

"It’s not really about the money. It's about who you hire as an agent who's going to give you 24-7 attention, who’s going to give you the best expertise," Cacace said, noting that the goal is for sellers to achieve a successful, smooth transaction. "We hold their hands from A to Z, from the very beginning to the end and walk through the whole process and coordinate everybody."

Wile said he couldn't agree more, saying that while Redfin charges lower fees than others, the firm is not a discount brokerage.

"We are a full-service brokerage. I don't take my own pictures. We hire professional photographers. We do open houses. We do a Matterport scan" to produce three-dimensional video tours for the website, he said. "A lot of time, when people are selling, they ask, 'What’s the catch?' But there is no catch. We are extremely attentive."

The jury is still out whether Redfin's model works in the Lower Hudson Valley where many firms are competing for their shares. Redfin's presence in the region is minuscule compared to powerful firms such as Houlihan Lawrence that sells thousands of homes annually.

And more alternative ways to sell homes with smaller fees are becoming available for consumers in the region, including Hauseit, which assists sellers who want to sell their homes without a listing agent.

"We are a new-age version of the flat-fee MLS listing," said Hauseit spokesman Chris Oliver, noting that the firm's additional services — such as professional photos, floor plans and a rental open house agent — allow sellers to appear as if they are represented by agents. "No one can tell you are getting a better deal."

Hauseit has been operating in New York City for about three years but has recently expanded to the Hudson Gateway Multiple Listing Service region, which encompasses Westchester, Rockland, Putnam and Orange counties.

For her, saving money in commissions wasn't her top priority, Walden said.

"That was a perk. I really didn't know until Ken told me about it," Walden said. "I wasn’t expecting less, so I was pleasantly surprised by that."

Twitter: @LohudAkiko