Redfin ramping up, sees a brighter spring ahead
Agent count is growing, teams are expanding and its new compensation plan — Redfin Next — is going national faster than expected, according to a top exec.
Key points:
- Jason Aleem, who leads the company’s real estate agents, says the push for Redfin Next has led to a 16% increase in agents this year.
- Along with a different compensation system, Redfin Next is also leading to more formalized Redfin teams, which could help with navigating NAR rule changes.
- Aleem said the company is starting to see lower commission fees in some areas, which he believes will make Redfin’s model more attractive.
Redfin's Jason Aleem believes that the real estate market will start turning around next spring, and is focused on making sure the company is ready to take advantage of the upswing.
Aleem, who leads Redfin's agents as the chief of real estate services, said pushing its new commission split program Redfin Next has led to the addition of more than 280 agents since the beginning of the year. Given that the Redfin had less than 1,700 agents at the end of 2023, that's a significant boost — more than 16%.
The Redfin Next program is scheduled to go nationwide on Oct. 27 — faster than originally planned — to make sure it can ramp up for the spring 2025 homebuying season.
Aleem said Redfin expects to add "hundreds" of new agents in the coming months because of the program, which offers splits as high as 75% and covers nearly all business expenses while providing healthcare, a 401(k) program and paid vacations, according to the company's website.
In an interview with Real Estate News, Aleem talked about Redfin's push to be ready for the rebound, how the company is adjusting to the National Association of Realtors' policy changes, and the formal development of Redfin teams.
Charging toward a booming spring
Aleem said the company wants to be prepared for a booming market where people are back out looking to buy when others are ready to sell.
"The best way we could do that is to attract a lot of the best agents to the business," Aleem said. "So our goal is to get geared up between next February and March."
Time for teams
Like many brokerages, Redfin has had teams for a while, but Aleem sees the Redfin Next program as a way to formalize and expand their team work.
"One way I think about it is (Redfin) Next is like a new base layer, a new operating system on how we run the business and teams is one of the first apps we're putting on top of that," Aleem said. "Now that we've got this new way that you can configure compensation and collaboration, teams just make sense."
He said Redfin agents are enthused about this because the company has a high-volume business model. Leveraging team members not only means better service for the client, but makes the job more enjoyable and sustainable, he said.
As they work on formalizing teams within Redfin Next, Aleem said they are also able to draw on the experience of the agents, since many have experience with teams at other brokerages.
"They've got ideas around what we should do for marketing, what we should do for routing, how we should think about our open house approach, how we should think about being able to have a work-life balance," Aleem said. "We're a curious company and we're always going to remain curious to make sure we're taking care of the customer.
Why the NAR settlement has been like Y2K
Overall adjusting to the NAR rule changes has been a smooth one so far, according to Aleem. He likened it to the Y2K, when everyone was worried about computer systems when the date changed from 1999 to 2000.
"So many of us were worried that everything's going to break on Aug. 17, but it didn't. We kept living our lives and selling homes and taking care of our customers," Aleem said.
Formalizing teams was in the works for a while, but the policy changes NAR made starting Aug. 17 also played a part. Those new rules include having a buyer agent agreement in place at the start of a client relationship and removing offers of compensation from multiple listing services.
Aleem said the biggest part of teams is how Redfin agents represent the transaction. An example is one person on the team representing the seller while another might focus on the open house and talking to the buyers.
When it comes to the buyer agent agreement, Aleem feels they already have a head start on the competition.
"We've worked hard on being really transparent about our fees," Aleem said, adding that the fees have been on the website and that consumers are able to sign an agreement online to get the process started, whether it's a trial basis or a more formalized hiring.
"We want to make sure that it's still easy for a customer to be able to see a home," Aleem said.
And yes, Aleem is confident that commission fees will come down, or compress, because of these changes.
"We've already seen it in spots," Aleem said. "Consumers are becoming more educated. Brokerages are going to figure out a way to be more competitive. And that's a good thing. I'm excited for us to meet customers where they are and create value."