Redfin Revolutionizes Real Estate with Non-Traditional Approach

Redfin, a Seattle-based online real estate company, has launched in the Atlanta market with a bold new approach to agent compensation and customer rewards. The company aims to change the traditional real estate model by paying agents a base salary, rather than a commission, and giving customers a share of the sales commission. This innovative approach has raised eyebrows among industry veterans, who argue that the traditional model is the most effective way to motivate agents. Despite the controversy, Redfin is confident that their approach will make the buying and selling process more consumer-friendly.

Key Takeaways:

• Redfin employs real estate agents and pays them a base salary, rather than a commission, based on the market's cost of living.
• Agents earn bonuses if clients provide a good review after the sale is closed.
• Redfin clients share in the commission earned by traditional agents, with the company taking the first $5,500 and sharing the remainder with the client.
• Home sellers who use Redfin pay a flat rate between $5,000 and $7,000 at closing, with the company considering moving to a percentage-based model.
• The company aims to double its number of agents to 400 in 2010 to meet growing demand, and plans to expand its presence in Atlanta and other markets.
• 97% of Redfin clients reported that they would recommend the company to friends, according to market manager James Marks.

Statistics:

• Redfin plans to double its number of agents to 400 in 2010.
• 97% of Redfin clients reported that they would recommend the company to friends.
• Redfin agents can earn a base salary of between $40,000 and $60,000 in Atlanta.
• The company takes the first $5,500 of the commission and gives the remainder to clients.
• A 3% commission on a $300,000 home sale would be $9,000, with Redfin keeping $5,500 and giving the client $3,500.

Sources:

• "Redfin enters Atlanta market with non-traditional approach" by Michelle E. Shaw, Internet-based publication, undated.
• Statement by James Marks, Redfin Atlanta market manager, undated.
• Statement by Glenn Kelman, Redfin CEO, undated.
• Statement by Jim Alexander, outgoing president of the Atlanta Board of Realtors, undated.