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Redfin and fifty of their referral program agents part ways

Redfin down fifty agents

National discount brokerage Redfin operates a “tiny, exclusive partner program” in areas where they do not operate offices and recently announced they have removed 50 partner agents from the program mostly in part to “mixed reviews” from consumers.

Redfin is notorious for asking consumers for feedback on agents through various steps in the real estate transaction and rather than let agents simply hang a license and pay a desk fee, Redfin has been very public about their willingness to let agents go which is a trait we admire and wish was adopted industry-wide.

In Redfin’s announcement of their removing 50 agents from their referral program, they noted that 42 were removed for “mixed reviews” while eight were removed for giving Redfin fake emails for their non-Redfin agents so that when Redfin surveyed their other clients (a standard practice agreed to when becoming a referral partner), they faked the reviews. Redfin claims they have software that can easily detect fakes.

Interestingly, Redfin states they don’t end up accepting 65% of all applicants to the referral program and of those accepted, they “end up asking one in six partner agents to leave the program later.”

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Redfin’s announcement could be seen as a PR stunt and recruiting tool by some, while others may see it as a line in the sand as the company stands up for their culture. What do you think about the announcement?

Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

29 Comments

29 Comments

  1. Sig

    May 9, 2011 at 7:07 am

    If agents "faked reviews" and/or Redfin fires them as part of a PR Stunt, then I think I"ll stay away. Who do you trust at this company?

  2. Matthew Thomson

    May 9, 2011 at 9:14 am

    I think it's odd that it was an announcement. We "de-hire" agents frequently if they aren't a match for our culture and don't add to our office in areas other than production.
    We don't announce it though…we don't believe that allows them to leave with dignity.
    A common saying in our company is no one transaction is worth your reputation, and that goes for any one agent as well.

  3. Greg Cook

    May 9, 2011 at 1:16 pm

    Lani, I'll probably get vilified for this, but good for RedFin for sticking with their business model.
    Brokers who are living under the old model are facing serious financial challenges because more doesn't equal better.

  4. Jason fox

    May 9, 2011 at 2:08 pm

    Redfins partner program is an excelkent program for most agents to take advantage of. They send agents a high number of leads, with a way above average closing rate. Agents are not required to pay for the leads untill closing, and Redfin only takes 15%, with another 15% going to the buyer/seller.

    It seems like Redfin does alot of work, and is staking its reputation on affiliates. By announcing the parting of ways, they are sending a message that the service they are offering is a benefit, and not just another cheesy lead source. It makes sense to me.

  5. Ben Fisher

    May 9, 2011 at 8:31 pm

    Completely agree with Jason here. Don't blame them one bit for this decision.

  6. Nikki

    May 9, 2011 at 10:08 pm

    If you think about it, any brokerage or individual agent simply has to do this in order to guarantee that the customer has a great experience when they make a referral in some way or another.

    I know agents who have had to stop sending referrals to agents they once were partners in the same office with after some client complaints, and brokerages who prioritize new leads to certain agents on their version of an "e-team" because they have proven that they give great service to someone starting their home search online.

    Caring about the experience of the customer makes this a necessity for everyone in the business who ever makes a referral. Everybody does this – but I don't know if this should be news. Interesting to read everyone's comments!

    P.S. Kudos on the Trump pic, Lani! Perfect accompaniment to the article.

    P.P.S. If this is the first time they are restricting referrals to some of their less service-centric partner agents, they waited too long!

    • Matt Goyer - Redfin

      May 12, 2011 at 3:52 pm

      Hi Nikki, we've been doing this since day 1. Just the first time we've talked about it publicly :).

  7. Mike Cooke

    May 10, 2011 at 8:27 am

    The Redfin model is based on multiple contradictions and fallacies.

    They claim to want only exceptional agents but their model is based on commission rebates and discounts. The commission structure attracts struggling, unsuccessful agents and thus works against Redfin's stated goal of offering a superb client experience.

    Redfin is built on an unexamined assumption that all agents are created equal and that all agents get the same result for a client. Thus, in their world, the best agent is the cheapest agent.

    But agents are not commodities like cars. Agents provide a service that is dependent on experience and expertise with a number of diverse skills like pricing, staging, marketing, negotiating, etc. A weakness in any area can cost a client big bucks. What good is it if your agent gives back 1% of his commission but his weak negotiating skills caused you to pay 2% more for the house than you would have paid if you had a better agent who gave no commission rebate?

    Think of it this way: Some football players are starters while others are 2nd string and 3rd string players. And they are not all paid the same amount because they are not all equally skilled at the game.

    Well, real estate agents are like football players. They are not all equally skilled. The Redfin model is set up to attract 3rd string players but expects them to perform like 1st string athletes. Good luck with that one.

    • Matt Goyer - Redfin

      May 12, 2011 at 5:29 pm

      Hi Mike,

      We certainly don't believe that all agents are created equal which is why we've invested so much into making sure we hire only the best and then retain only the best.

      I know some folks have a hard time understanding why good agents would choose the salaried world of Redfin over the traditional commission split model, but we've found that there are many great agents out there who love working with customers and don't miss the split/desk fee work or having to do their own customer generation.

      We too were worried about our agents negotiating experience and dug in and found that our agents are just as good if not better negotiators:
      https://blog.redfin.com/blog/2008/03/the_redfin_advantage_bigger_broader_higher_statistical_confidence.html

      Hopefully you work with one of our agents soon!

  8. Milan in Portland

    May 21, 2011 at 4:22 pm

    I think Mike put it well. There is an inherent contradiction between discounted commissions and first class customer service, though I am nonetheless impressed by the Redfin reviews and have always appreciated their search tools.

  9. Mike

    July 15, 2011 at 2:02 pm

    Redfin is taking the real estate industry to a whole new level with customer service being key. I think it’s great. If Redfin wants to be successful with it they can’t afford to keep unethical agents around.

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