The real estate industry has remained relatively unchanged for many years. As Tech Crunch puts it:
Most real estate agents are commission-based and incentivized to focus on the big sales. That results in inefficiencies for lower class home buyers, who may have to wait longer to view properties and receive less guidance on paperwork.
Unless there was a major market revolution, there is no reason to think that this will change. However, we may be at the precipice of that revolution.
A Miami-based startup called Home61 has been working on a solution for this category of buyers and renters, which it refers to as the “other 80%.” Home 61 is building “an ecosystem for real estate for the mass market,” founder and CEO Olivier Grinda tells TechCrunch.
To do this, they plan on offering their agents significantly higher salaries to mitigate commissions. “This incentivizes them to give attention to all clients, regardless of the home price.”
This attempt to break into the lower levels of the real estate market through a new business model has been a tactic that has been adopted by several other companies as well.
Competitors Redfin launched their own strategy that involves them using a 1% listing fee to lure clients. According to an interview with Housingwire:
According to Redfin, approximately 80% of Redfin’s home selling customers will pay Redfin just 1% of the final sale price, subject to a minimum of between $3,000 to $5,500, depending on the market. “This pricing better reflects how our customers want to pay a real estate agent,” Redfin CEO Glenn Kelman said.
Redfin has used the popularity of this model to expand to over a dozen cities in recent months.
The introduction of fresh business models to an industry that left many people feeling left out is a welcome sight. Where larger realtors have let lower value housing stand by the wayside, startups such as Home61 and Redfin are adapting to the market and positioning themselves to better serve the majority of the housing market. Be sure to keep an eye out for them going forward.
To read Tech Crunch’s article on Home61, click here.
To read Housingwire’s article on Redfin, click here.
[grwebform url=”https://app.getresponse.com/view_webform_v2.js?u=BKTzq&webforms_id=14603302″ css=”on” center=”off” center_margin=”200″/]
You may be interested
Job Hiring is Picking Up as Employers and Consumers Gain ConfidenceLamont J - March 29, 2021
The recent government stimulus for small and medium-sized businesses, personal stimulus checks, and declining Coronavirus cases, are all great news…
Fed Could Maintain 0% Interest Rate Until 2024Adam R - March 26, 2021
The Federal Reserve is holding its target interest rate in a range of 0.00% - 0.25%, even while the economy…