Though it’s best known as a website that lets you gawk at real-estate listings, Redfin is also a brokerage. Since starting with one Washington agent in 2007, the company has grown to about 160 here—and they haven’t been warmly received by the competition.
Ask an agent from a “traditional” brokerage what she thinks of Redfin agents and you’ll probably hear that they don’t know the market well and the only reason they’re with Redfin is that they can’t cut it anywhere else. “It’s like comparing a line cook at McDonald’s and José Andrés,” says Daniel Heider, an agent with TTR Sotheby’s International Realty.
Heider and other traditional agents point out that Redfin clients often wind up working with more than one person and don’t build the kind of personal agent/client relationship that other brokerages encourage. The shade-throwing, though, is based largely on the fact that Redfin listing agents take only a 1-percent commission from clients, while other agents take 2.5 or 3 percent. And who, other than a rookie, would leave all that money on the table?
But Redfin agents get perks that others don’t. They make a base salary, so they don’t depend solely on commissions. They’re employees (agents elsewhere are independent contractors), so they get full health benefits plus reimbursement for expenses like gas mileage.
Despite the leaner commission, they still have incentive to work. Redfin pays them a fee for each showing—regardless of which brokerage employs the house’s listing agent—and once a sale closes, they get a bonus based on a customer-satisfaction survey.
Agent Michael Alderfer, who has been with the company five years, says he gets why other companies don’t like him and his colleagues: “Because it’s almost like we’re saying, ‘You’re ripping people off.’ ” Actually, that’s exactly what Redfin is saying.