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A little over a month after debuting its new commission-based payment model in San Francisco and Los Angeles, Redfin has expanded the program to San Diego and Orange County, California.
Now dubbed Redfin Next, the program enables agents to keep their full-time W-2 status and traditional benefits while receiving commission splits as high as 75 percent. Redfin will continue to cover agents’ business expenses, and provide access to Redfin technology, support programs and leads. Redfin Next will go into effect on Jan. 1, 2024.
Jason Aleem. Image: Redfin
“We set out to create a compelling compensation plan that would wow agents from across the industry by offering the best of both worlds: a big traditional split coupled with Redfin.com customers, benefits and support,” Redfin SVP of Real Estate Operations Jason Aleem said in a prepared statement on Tuesday. “We couldn’t be happier with the early response in Los Angeles and San Francisco and feel even more confident that this plan will help us retain and recruit top talent and ultimately grow our market share in California next year.”
In a previous interview with Inman, Aleem said Redfin Next — which was previously called Redfin Max — solves one of the biggest recruiting barriers for the company, especially when it comes to attracting experienced, high-producing talent.
Under the old model, Redfin’s top-tier agents had an average pay of $750,000 to $800,000 per year, which included their salary and performance-based bonuses. Overall, the average Redfin agent could expect to earn within the mid-five figures during their first year — well above the $9,600 first-year Realtors reported earning in the National Association of Realtors’ latest member profile.
Aleem and Redfin CEO Glenn Kelman said the shift to Redfin Next will fast-track top-tier agents’ journey to the $1 million mark as soon as next year.
“The most basic design requirement for Redfin Max was for an agent to be able to do that, as soon as next year,” Kelman said. “We can afford to pay top agents more, because those agents are already so profitable, generating high-margin revenues from Redfin-sourced sales. The more top producers we recruit, the more profitable we’ll be.”
Aleem said Redfin Next is already working its magic in Los Angeles and San Franciso, with nearly 40 top-producing agents joining the brokerage’s teams in both markets. “[We are] having conversations with dozens more top-producing agents who are interested in joining the company,” he said.
Agents in other cities will continue to work under the salaried model until Redfin Next launches in their market, the company explained.
