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Redfin

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Where Redfin cannot or refuses to directly serve consumers, the company relies on a referral network of over 3,100 agents at other brokerages. In 2017 out of 7,733 of Redfin's real estate transactions originated 2,041 were completed by its referral network. Referral agents pay Redfin when they close referred transactions, less the amount of any refund payments Redfin may make to customers. Once Redfin refers a customer to a partner agent, that agent, not Redfin, represents the customer from the initial meeting through closing, at which point the agent pays Redfin a portion of her commission as a referral fee. Redfin currently charges a 30% referral fee from agents that participate in this program. Referral fees lead to an inefficiency known as "reverse competition" where referring brokers end up competing not for the consumer attention but for the attention of middle-man who steers the consumer toward its network of brokers and away from competitors. Such steering may result in lower quality of service or higher commissions, fees, and price levels. Some real estate agents advocate that referral fee brokers make consumers a commodity that the referral broker is selling to another agent.



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