Along with making staffing cuts, Redfin has implemented various initiatives aimed at positioning the company for success in the current year.
The shift to a more traditional commission split model with Redfin Next, moving away from the original salaried agent model, led to some agents leaving Redfin along with their client base. However, CEO Kelman stated that this change is proving beneficial.
In Q4 2024, Redfin brought on 399 new agents, with a 25% increase in agent count over the past six months. Kelman noted that new hires are already outperforming more experienced agents, showcasing the success of the recruitment efforts.
Despite initial dissatisfaction among some agents with the Redfin Next model changes, Kelman emphasized that the transition has enabled the company to attract seasoned and high-quality agents, allowing for a curated selection of agents.
He highlighted the importance of monitoring agent performance to ensure alignment with Redfin’s standards, expressing satisfaction with the shift in the company’s approach.
In addition to changes in commission payment models, Redfin has eliminated certain benefits such as vacation pay to reduce costs, following a decline in real estate services gross margins in Q4 2024.
The company’s focus on enhancing profitability extends beyond agent recruitment, with a strong emphasis on the mortgage, title, and digital advertising segments. The recent partnership with Zillow for rentals is expected to boost traffic and revenue.
CEO Kelman also addressed the ongoing debate surrounding the National Association of Realtors’ Clear Cooperation Policy, emphasizing the importance of maximum exposure for listings in a competitive market.
As Redfin navigates industry challenges and strives for growth, Kelman reiterated the company’s commitment to driving demand for listings and providing a competitive edge in the real estate market.