"Today Redfin laid off roughly 20% of our employees" writes Glenn Kelman, Redfin CEO on his corporate blog.
You won’t hear these words from the traditional real estate brokerages where agents are not paid salaries. They’re living (or trying to) from closing to closing. Some are doing better than others and others are having to make hard choices about their careers and personal finances.
The traditional brokerages do not announce that 10 or 20% of their agents have not received a commission check in the past few months or are not able to pay their desk fees. Agents move to less expensive offices or they just move on.
It is a very challenging market. And while the many will focus on the struggles of Joe Six Pack, who opted for the wrong mortgage at the wrong time; very few will have sympathy for the struggling real estate agent who made their living from the Joes of this world.
Glenn’s announcement is a sad one. I don’t have established "relationships" with Redfin agents. I do with home buyers who have utilized Redfin. I admire Glenn’s honesty and wish everyone in the market well. I have been very fortunate to work with Washington State buyers and home owners who read my blogs, my past clients who return for their mortgage needs and who refer their friends to me and real estate agents who are trying to stick out this market. At this time and always, I THANK YOU ALL.
Hopefully with today’s gains in the market, we’ll have the confidence that our markets need to stabilize.
That is interesting. The broker model truly is survival of the fittest. Agents that need a salary, usually aren’t the fittest…
What many companies like Redfin (and big banks on the mortgage side) often do not understand is that agents/LOs are highly paid because we are RAIN MAKERS. In other words, we bring in the business whether times are slow or booming.
A lot of these companies that try to disintermediate the real estate broker/LO have not grasped that concept which is why most fail miserably, especially when times are slow. It is easy to staff up a call center with agents/LOs and pay them peanuts when clients are falling off the trees, but it is a whole different ball game when you have to actually bring in business on your own.
It’s indeed facinating times, Russ. And…I wonder if there are any stats for agents and LO’s who are paid 1099 w/out unemployment benefits–who are no longer working? We won’t see their stats in the Jobs Report but I’m sure a lot of people in the RE industry are hurting.