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July 3, 2010

ZipRealty, the United State’s fifth largest brokerage based on transaction volume, is turning all of its California-based agents into independent contractors on Sept. 1 2010.

For Canadian brokerages considering adopting the employee model, to encourage better customer service and uniformity, the move by ZipRealty is an interesting one.

ZipRealty has 910 agents in California, about 28 percent of its total number of agents nationwide. In all but two of the 35 markets ZipRealty covers, the company’s agents are employees. The two exceptions have been Las Vegas and New York, where agents are independent contractors. Converting its California employees to contractors suggests Ziprealty is seeing continued greater advantage with the contractor model versus that of employees.

ZipRealty’s California agents will continue to have access to the Company’s proprietary technology, marketing support, and training and brokerage resources. ZipRealty’s independent contractor agents will be free to develop their own work styles and will have access to an expanding array of compensation alternatives, all of which revolve around the ZipRealty’s differentiated value proposition. ZipRealty will continue to offer its unique customer satisfaction guarantee and to reward its agents for delivering outstanding client service.

“Moving to an independent contractor structure in California will not take our focus off of delivering great home buying and selling experiences to our customers, and we plan to use our technology to bring innovation to the independent contractor model,” Lashinsky said. “From a financial standpoint, this shift is expected to provide greater opportunity for our agents, while also improving ZipRealty’s ability to drive growth and innovation long term.”

The conversion means ZipRealty will no longer offer medical, dental or 401(k) benefits to the former employees.

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