On the Rocks: RE/MAX Splits From Short-Lived Partnership With Redfin

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Just two months after entering an agreement, Redfin’s new program that cuts out buyer’s agents has RE/MAX out the door.

It was a quick divorce from a two-month romance. And to be honest, sort of a head-scratcher.

In mid-March, RE/MAX, the 40-year-old, Denver-based national real estate franchise broker announced a unique partnership with Redfin, the tech-focused brokerage that has morphed over the years, from trying to wipe out the Real Estate agent to employing them with discounted commission fees. The partnership gave RE/MAX agents exclusive access to Redfin’s agent referral program — albeit at a discounted rate (25 percent versus 30 percent of the agent’s commission, the standard for referral fees) — in 5,000 U.S. ZIP codes and throughout Canada, where Redfin recently launched its highly navigated home search website.

Ostensibly this was done, RE/MAX leaders claimed, to partner up with an online brokerage.

“Redfin is a good complement to the RE/MAX model, given their online presence and our offline presence,” Kerri Callahan, RE/MAX’s chief financial officer, said to Inman News in March. 

Leaders of both companies were crowing about reciprocal revenue potential, but the honeymoon ended on Monday.

Redfin’s launch of a new program that would essentially cut out buyers agents altogether had one unanticipated result: RE/MAX withdrew from its corporate partnership with Redfin. 

“Redfin has the utmost respect for RE/MAX as a company, for its agents and leaders. RE/MAX agents who already work as Redfin’s partner agents will continue to be our partners, and RE/MAX agents can continue to enroll in our partner program, but Redfin can now enroll partner agents from other brokerages to serve Redfin.com visitors in the U.S. and Canada,” the company said in a statement.

Why would RE/MAX pull the plug?

Redfin Direct, the new service piloting in Boston, will allow Redfin’s listing customers to get offers direct from unrepresented buyers. Redfin Direct’s goal was to give the seller a competitive offer requiring a 2 percent (total!) commission – 1 percent to the Redfin listing agent and a 1 percent transaction fee. We asked Dallas agents to wax on about this last week.

This would, in effect, wipe out the buyer’s agent to save consumers money. That did not go over well with RE/MAX head honchos, including CEO Adam Contos,  who had an apparent change of heart after supporting Redfin Direct just last week.

Redfin Direct gives buyers the option of making offers to Redfin-listed properties without an agent. The program just started a pilot in Boston. (Image: Redfin)

Monday he said of RD:  “That program goes against every value RE/MAX has had for more than 45 years,” Contos said in the letter announcing the end of what would have been a two-year partnership. “I feel very strongly and passionately about that, as does our Board of Directors and my leadership team.”

Redfin said they understood, even though they had been open about the new technology. They basically said they understand the fears of Realtors, as the company also employs “thousands of licensed professionals and believe the vast majority of homebuyers need professional advice, and will happily pay for it.”

But here is the money quote:  “We believe in consumer choices; our mission is to redefine real estate in consumers’ favor.”

The big question, then, is at what point will real estate be re-designed in consumer’s favor but without the agent? Here is Redfin’s statement.

We reached out to Matt Templeton of Keller Williams Urban Dallas, who at the moment is in Austin getting a KW technology update.
“The pace of technological change is pushing companies to also move quickly — what inevitably happens are mistakes,” Templeton said. “Fumbles are in the plays as industry incumbents try to figure out how they will win in the future. “
The truth is, Templeton said, that RE/MAX and Redfin were never going to have a lasting partnership.  The brokerage that has openly said,  “We want to make the middleman as cheap and as small as possible” — that is Redfin, quoted in Fast Company — was always going to have a conflict with a brokerage that still believes in a full-service consumer experience.
“I suspected this unlikely partnership was of course going to break up after Redfin announced that they would offer a way for buyers to make offers on their listings without a Realtor.  That seems to be what prompted these issues,” Templeton said. “The RE/MAX agents were having a trip as well — their clients were starting to ask them to get the same discounts that the Redfin agent would give now that they were ‘partnered.’ It was like RE/MAX said, ‘Sure, we will partner with a nemesis who has proclaimed that they want to put brokerages and agents like us out of business.  We will take the short-term benefit of your leads knowing that you hope to use this as a distribution network to enter into the markets that you haven’t been able to enter yet so that when you are strong enough in those markets, you can continue on your mission of putting us out of business.’ “
Now the industry question is this: At what cost did RE/MAX undertake this experiment? Did the company give up valuable data? Will there be backlash? What does this actually tell us about the state of both the Redfin network and the RE/MAX system? Will there be more such experiments? And finally…

What do you think this will do to the Dallas real estate market should Redfin roll out a similar program in North Texas?

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Candy Evans

A real estate muckraker, Candy Evans is one of the nation’s leading real estate reporters. She is also the North Texas real estate editor for Forbes.com, CultureMap Dallas, Modern Luxury Dallas, & the Katy Trail Weekly. Candy has written for Joel Kotkin’s The New Geography, Inman Real Estate News, plus a host of national sites. Constantly breaking celebrity real estate news, she scooped former president George W. Bush's Dallas home in 2008. She is the founder and publisher of her signature CandysDirt.com, and SecondShelters.com, devoted to the vacation home market. Her verticals have won many awards, including Best Blog by the venerable National Association of Real Estate Editors, one of the nation’s oldest and most prestigious journalism associations. Candy holds an active Texas real estate license but does not sell. She is on the Board of Directors of Braemar Hotels & Resorts (BHR).

Reader Interactions


  1. Dr. Timothy B. Jones says

    Interesting…..really interesting. The entire residential real estate sales landscape is changing and faster than most of the players would prefer. Listing agreements are no longer simple 6% fee based contracts but rather contain a myriad of exceptions and contingencies. Sellers need professionals to market their property (so few realtors are really good at that and think MLS is all the marketing the seller needs…it’s not!) First time buyers need a lot of help, nurturing and support and they should hire someone to help them but they should also be willing to pay directly for it. I’m not going to let the sellers attorney represent me if I’m buying and so I shouldn’t expect the seller to pay for my representation. It’s two separate arrangements….not one to be paid for by the seller. Sellers should be able to get market rates for property without discounting it the price of paying the buyers representation. ReMAX and others better figure that out (Redfin has already). At today’s property prices, real estate commissions are generally higher than the consumer demand will pay. Door and others are proving that. I’ll pay, and pay well an agent who aggressively markets my property and represents me in the transaction. I’m not willing to pay for a novice buyer or any buyer for theirs needs and representation in the transaction and why I haven’t paid 6% in many years. The cost of buyer representation should not be factored into selling price, comps, mortgage amount or anything else. It’s is and has been a screwed up way to compensate agents that buyers think they need. To a savvy buyer, a buyers agent isn’t usually necessary. Buyers use them only because under this screwed up system it’s not really costing them…..it’s costing the seller!

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