Redfin furloughs 41 percent of real estate agents

Redfin has furloughed 41 percent of its real estate agents. The brokerage's pending sales fell 42 percent in the last week of March from the year before. Redfin has furloughed 41 percent of its real estate agents. The brokerage's pending sales fell 42 percent in the last week of March from the year before. Image 1 of / 1 Caption Close Redfin furloughs 41 percent of real estate agents 1 / 1 Back to Gallery

Redfin has furloughed 41 percent of its salaried real estate agents as the economic impacts of the novel coronavirus have slowed home sales. The majority were furloughed until Sept. 1; renovators and others who supported those agents have also been furloughed. Seven percent of Redfin employees have been laid off permanently.

Redfin said the recent $2 trillion stimulus package meant to alleviate the losses to businesses and those losing their jobs played a role in its decision.

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"We decided on this large-scale furlough because fewer people are buying and selling homes, but another factor was the federal government's $600 weekly contribution to each person's unemployment insurance," wrote Glenn Kelman, Redfin's chief executive, in an announcement to investors.

Assuming every state opts into the new legislation, known as the CARES Act, Redfin estimated 75 percent of its real estate agents will earn more from unemployment than they would from Redfin. Redfin agents are salaried, but most of their take-home pay comes from bonuses based on the prices of homes they help clients sell or buy. With pending transactions down 42 percent in the last week of March from the year before, those bonuses have fallen dramatically.

The fall in pending sales is a concerning development for the real estate industry overall. Because real estate agents do not have a base salary -- the majority of real estate agents rely solely on commissions -- the fall in sales has an even greater impact on their incomes.

"I'm sorry we let you down," Kelman said. "We'll fight like wild animals to bring everyone on furlough back."