Whether you’re refining your business model, mastering new technology, or finding a strategy to take advantage of the next market boom, Inman Connect New York prepares you to take a bold step. The next chapter is about to begin. Please join us. Join us and thousands of other real estate leaders from January 22-24, 2025.
This is the fourth installment of Inman’s Talking Talent series. Click here for Part 1. Click here for part 2. Click here for part 3.
With everything going on this year, including the Commission lawsuit, the Department of Justice, and a weak market, Redfin may not have been on the radar this year. But it should have been.
Participate in the December INMAN Intel Index Survey
At a time when much of the industry is dealing with existential fear, Redfin has made a major pivot. Redfin Next. The program was announced in late 2023 but rolled out nationally in 2024, eliminating Redfin’s old salary model for agents and replacing it with commissions. The move was clearly a play to attract stronger talent. While some companies have turned to acquisitions, franchising, or global expansion to find talent during these uncertain times, Redfin has chosen a different path and focused on one of its core differentiators: I reconsidered one.
Jason Aleem
As part of our Talking Talent series, Inman recently interviewed Jason Aleem, head of real estate services at Redfin. The conversation touched specifically on Redfin Next and how the company is thinking about recruitment and retention at this time.
And the takeaway from this conversation is that Redfin Next’s fee model is working, according to Aleem. The company has hired hundreds of agents since the program launched, including “boomerang agents” who previously worked for Redfin, and their own incomes have increased. From that perspective, Aleem said the move was clearly the right one for Redfin.
Below is a version of Inman and Aleem’s conversation, edited for length and clarity.
Inman: This year has been a new type of year for Redfin as we pivot to a commission model. Please tell me how it’s going.
Jason Aleem: This is one of the most transformative initiatives we have ever undertaken for our company and our customers. And it’s all built around having the best agents and providing the best customer experience.
If you look at what we’ve done so far, we have about 1,800 agents. We hired about 700 people under this Next program, which doesn’t seem like a huge number compared to other brokerage firms. But you don’t need that many agents to become a small but powerful team. Part of that is because if you look at Real Trends, our volume per agent is much higher than our competitors. So we were able to staff pretty aggressively through Next.
In how many markets has this model been deployed?
We did this in four waves. Now deployed in all Redfin markets. So we launched it in four markets and quickly realized that this was indeed a good thing for our customers, as we saw an increase in win rates. That’s how many people come to see us and actually decide to work with us. And more agents started making more money and becoming happier.
Then we started to see that different agents and talent were attracted to the business. So, in January, we were operating in four markets, and by the end of October, we had expanded nationwide.
We did see a slight decline, which is to be expected with such a large transition. However, the majority of top agents stayed on. The amazing thing is that many of the so-called boomerang agents are starting to return to the company, having seen that this plan actually works.
Now that this transition has begun, have the types of transactions that agents process changed? For example, are agents more or less extravagant? Is a typical Redfin transaction different now?
Most transactions are the same.
In terms of how we create demand, it hasn’t changed at all. But I would say a lot of the talent that we’re attracting is driving the higher end of the loyalty business. And they brought in some of that business, which led to us being even more luxurious.
The other thing I would say is that a lot of the people who participated are better at different high-end spaces. As a result, we are now able to treat our high-end customers more carefully than before.
Is the average Redfin agent making more money now than they did a year ago?
If you look at the Wave One markets, which were basically Southern California and San Francisco – Los Angeles, Orange County, San Diego, San Francisco – people in those markets are making about 25 percent more this year than they were last year. A year ago.
And if you go to the second wave bucket (I think Chicago, Dallas, Miami, New York, Palm Beach, and DC and Connecticut), they’re making about 20% more than they were a year ago. And that’s average at both locations. But there are people in those markets who are trying to completely crush it.
We set a goal for the first $1 million producer to actually take home $1 million. And we did it. We made it happen in Orange County.
And we have an agent in the Chicago market who made about $250,000 in the first three months with this new plan. So it’s clear that this is the plan when it comes to increasing compensation year after year.
You mentioned boomerang agents. Do you have numbers on how many people stay at Redfin, leave and come back?
One of the things I’m most excited about is the Boomerang Agent. These are people who got to know Redfin, got to know the Redfin culture, got to know the Redfin system, got to know Redfin’s leadership, and for whatever reason decided to leave and try something else. That’s great. Then they heard about this new plan and said it was the best of both worlds.
Of the approximately 700 agents I mentioned earlier, approximately 13% are boomerang agents.
Do you go out and actively headhunt, or are most of the people who join Redfin looking for you?
both.
Previously, we were more of a passive recruiting team, with a lot of people looking for us.
But we have a new belief. That is, “Sales leaders are recruiters.” Additionally, many sales leaders who previously focused on managing their teams and ensuring they are customer-focused have now redirected the majority of their time to building their teams through recruitment and retention.
That’s why sales leaders closest to the business take this process seriously. So if you look at the mix, you’ll see a healthy influx of new talent because existing agents have referred them.
This year has been perhaps the most tumultuous year in history for the real estate industry, with all the commission lawsuits. I spoke to an agent during the hiring process, what are they saying?
This year there was a seismic shift. We want to have those conversations with people. And one of the best things about having sales leaders as recruiters is that you get real conversations in the field with people who actually have the information.
When it comes to things like NAR, we strive to take an approach that goes back to our values of transparency and the on-demand convenience of being able to watch on-the-go from the comfort of your own home. But we also wanted to make sure we were fully code compliant and compliant.
That’s why we have fee agreements in place that make it very easy for people to get into your home, but also allow you to comply with the rules. That means attracting talent. There are talented players who stay with us because they get more at-bats.
Our stance on Clear Collaboration is to keep the marketplace open and enable us to serve our customers and sellers in the way they deserve. This is attractive to our agents.
You mentioned NAR. Redfin itself has left NAR, but I’m curious about the agent itself. Are most Redfin agents still members?
Most agents are still members. Once you do your research, it is very difficult to break out of that organization. Because operationally, so many parts of your business depend on access to information, access to forms, and collaboration.
We still hold the same stance on some things that need to change regarding NAR. But at the end of the day, we have to take care of our customers and our agents. So we are carefully considering how to get out of that situation.
What is your message to agents and brokers now?
Please call me. Let’s talk. The world is changing.
I think we will see more and more consolidation in this field. If you want to go to a place where you can focus 100% on your customers and what you do best, give us a call. There are lots of easy buttons to help agents jump right in and get things done. What they do best.
Jim Dalrymple II
