In San Francisco and Los Angeles, Redfin is launching a new pay plan offering the agents we employ traditional commission splits, paired with Redfin’s customers, benefits and support. Agents interested in learning more about the plan can visit redfin.com/next.
A Split Up to 75%. 100+ Customers per Year. Virtually No Expenses.
Under this plan, called Redfin Next, agents will earn splits as high as 75% on their own deals, and meet 100+ Redfin customers per year. Once you account for the Redfin-borne costs traditionally paid by agents, including benefits, mileage, payroll taxes and listing expenses, the effective split for self-sourced sales will top out at roughly 90%.
Redfin Agents Thrive Because of the Access to Customers, Not the Salary
To fund higher bonuses, Redfin is eliminating agent salaries in San Francisco and LA, a tradeoff widely requested by the vast majority of our California agents. But we still believe that you can’t ask an agent to put customers first if that agent herself isn’t thriving. With or without a salary, we’re going to give our agents the customers and support staff to close several sales every month. We’ll also offer agents access to our vast customer database, with tools for tracking and acting on customers’ online activity. Our benefits will still include health insurance, a 401(k) match and a stock-purchase plan.
Relationships You Can Build On For Life
After hundreds of millions in sales at other brokerages, Craig Pellegrini joined us in part on the promise of what he will be able to earn under Redfin Next. He makes our pitch to agents better than I could:
I came to Redfin because it offers everything I need to grow my business with no overhead. I can focus on the highest and best use of my time by serving customers, while Redfin takes care of the day-to-day hassles and expenses. My transaction coordinator and support team are amazing and Redfin’s technology platform is unmatched by anything else I’ve seen in this industry. At Redfin, I’m not cold-calling customers; they come to me. Next week, I’m closing a $5-million transaction with someone I met through Redfin and that’s now a relationship I can build on for life.
Accelerate Your Business Plan by a Decade
And it’s not just Craig. Any agent who shares our values should jump at the chance to build a larger business on Redfin’s platform. Each agent gets support staff to schedule and host tours, qualify opportunities, and handle paperwork. An exceptional agent could reach this scale in a decade on her own, or join Redfin and start at that level from day one. Even before today’s announcement, more than a half dozen top producers have already signed on.
Why the Change: In the Most Expensive Markets, More Pay
Our goal with Next is the same as it has always been: to hire and retain the world’s best agents, which is why we’ve long offered the highest average pay of any major brokerage. At no other major brokerage do most agents earn six figures, free and clear of any expenses. The problem has been that in our highest-priced markets, our best agents say “average schmaverage, what’s the top of the range?”
Our Goal: Million-Dollar Agents
With our standard pay, the top has been between $750,000 and $800,000 per year. Our brokerage leader, Jason Aleem, has long wanted that number to be more than $1 million a year. The most basic design requirement for Redfin Next was for an agent to be able to do that, as soon as next year. We can afford to pay top agents more, because those agents are already so profitable, generating high-margin revenues from Redfin-sourced sales. The more top producers we recruit, the more profitable we’ll be.
“This Is What We’ve Been Waiting For”
Among Redfin’s existing agents, some have worried about eliminating salaries in lieu of bigger bonuses. But mostly the plan has drawn rave reviews. One agent said, “I’m elated! I will retire from Redfin.” Another said, “I’ve been at Redfin for a long time, so many ups and downs. Everything feels so good at Redfin right now.” A third said, “This is what we’ve been waiting for.”
A Whole New Redfin?
But even if our own agents have long seen this coming, the rest of the real estate world may be surprised. For anyone who thinks Redfin’s defining characteristic has been offering our agents a salary, Redfin Next must seem like a complete about-face. If that starts a conversation between Redfin and people who never would’ve dreamed of joining us before, all the better.
The Systems Exists to Support the Salesperson
Redfin Next is the culmination of a change that started from our first year as a brokerage. Before I’d actually run a brokerage, I imagined the system was more important than the sales person. But the industry taught me that the customer doesn’t care about the system unless it’s the reason you can hire better sales people. By eliminating agents’ concerns over splits, Redfin Next weaponizes that system. No other broker can offer its agents the #1 brokerage site, reaching more than 50 million people a month, or a support network of coordinators and showing assistants, or the industry’s best software for staying in touch with clients.
Our Mission More Than Ever
But even though our recruiting philosophy has changed, our mission is the same: to redefine real estate in consumers’ favor. Alone among brokers, we exist to give the consumer a better deal, which is why we’ll always offer low fees.
We’ll Always Put the Customer First
And alone among major brokers, we employ our agents. When conceiving of Redfin Next, we briefly considered hiring agents as contractors, but decided against it because employing agents is the only way to set service standards, or to insist that every agent put the customer first. Redfin Next changes nothing about our mission except our ability to execute on it.
Thousands, Not Hundreds, of New Agents
We see Redfin Next as a platform for a wider range of agents to be more successful than ever before. It shouldn’t be so hard to succeed as an agent. The vast majority of agents, without marketing resources, a customer network or a support team, are struggling. Redfin should be open to any talented, hard-working agent who shares our values, which should be thousands of agents, not the hundred or so we hire most years. We’re starting small now, but we hope this can be big.
Starting in California, Expanding from There
We’re starting Redfin Next in these California markets that need it the most, but we intend to expand it to other high-priced markets. The pay takes effect January 1, 2024; the people we recruit now will earn a salary through the holidays :-).
Editors Note: Redfin Next was rebranded from Redfin Max in December 2023. The original post was updated to reflect the new name.
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