Just two months into a new lead-referral partnership between RE/MAX and Redfin, the deal has already been called off.
The reason? Redfin’s announced last week that it is rolling out a pilot program, “Redfin Direct,” according to Inman, which would allow consumers to make direct offers on homes, cutting out buyers’ agents from the process.
“That program goes against every value RE/MAX has had for more than 45 years,” RE/MAX CEO Adam Contos said in a letter on Monday announcing the end of the partnership. “I feel very strongly and passionately about that, as does our Board of Directors and my leadership team.”
The initial partnership between the brokerages was slated to last two years, with RE/MAX agents getting exclusive access to Redfin’s agent referral program across 5,000 U.S. ZIP codes and Canada, where Redfin didn’t have a presence. Redfin would take 25 percent of the commission for referrals, rather than the usual rate of 30 percent.
In a statement announcing the end of the partnership, Redfin said it had no plans to cut buyers’ agents out of deals, noting that “the vast majority of homebuyers need professional advice, and will happily pay for it.”
“But we also have a duty to get as many offers for our customers’ listings as we possibly can, and to give those listing customers the best value,” the statement continued. “We believe in consumer choices; our mission is to redefine real estate in consumers’ favor.”
The Redfin Direct program began with a test run in Boston, and is expected to roll out in Virginia next, with other markets to follow. At the same time, the Seattle-based discount brokerage says it has no plans to end its Partner Agent program.
“We still have mutual esteem between the two companies,” RE/MAX’s Kelman told Inman. He also noted in his letter that none of the firm’s Redfin Partner Agents are being asked to stop using the platform as a tool. [Inman] — Kevin Sun