Can this be true? Is this more nonsense?
by MattThis new report from Redfin has taken off, and by just looking at the comments I think Traditional Agents (TA’s from now on) are jumping into the ring.
First off, here is an interesting comment from Glenn over on Freakonomics:
Our cost structure and our business model are radically different. Redfin has virtually no customer acquisition costs except from development of our website; traditional agents spend 67% to 90% of their time looking for new clients.
We can afford to pay our agents double or triple the industry average, so we get the cream of the crop, and those agents can focus exclusively on closing deals; customer find the home they want to buy on their own.
I just cannot believe this statement…if this is true, why would any agent in the market today want to be a TA?
The average income is around $60,000 for a TA, so if I break out my calc, I see that a Redfin agents makes around $120K and $180K respectively (someone, please check this.). This is good income for many agents.
but…
Top agents make well over $180K a year, so I find it very hard to believe that the cream of the crop is leaving the TA model for the Redfin model. Of course, if you look at the trade off…no more lead generation and no more showing homes, it might be worth it.
The hardest part about becoming a top agent is the lead generation. Anyone can master the contracts, but getting leads is make or break in real estate. So a top agent will struggle for years to create a base of loyal clients, then throw that special skill away so they can churn out contracts?
One thing TA’s can learn from Redfin, is how to create huge buzz. The wave Glenn created is not going to break for a looooong time.
Tags:Commissions freakonomics Lead generation RedfinPopularity: 7% [?]
Hi there,
Thanks for your kind words. We said double or triple, taking the industry average at closer to $35,000 - $40,000, which is what I had always heard was the average.
A Redfin agent can earn more than double that, not including: stock options, paid vacation, a full benefits package, catered lunch three days per week, travel expenses, home office equipment, Internet expenses, 401(k) benefits, company events and cell phone reimbursement. Also a Redfin agent doesn’t have to pay any marketing expenses.
We are developing a career path that allows our best agents to earn even more.
But our agents work very hard. You won’t ever earn $1 million in commissions as a Redfin agent, but hopefully you’ll have a career that can develop and you can be a part of something really special.
February 27th, 2007 at 3:23 am$35,000???
It’s sad that the huge commissions real estate agents make don’t give them a higher income.
It is also sad that traditional agents work harder then Redfin agents, but make 2-3 times less?
Interesting stuff…my partner is looking at Redfin’s model and thinking about implementing the same model for her buyers agents. Maybe more agents should look into this model?
February 27th, 2007 at 6:25 amAn average of $35,000 across america. The area’s that Redfin is in have a much higher average. Seattle, San Francisco, LA are all high priced areas, so the $35,000 average salary is not correct either.
March 1st, 2007 at 12:50 am[…] Can this be true? Is this more nonsense? […]
March 3rd, 2007 at 11:06 am