LessThan6Percent, a matchmaking website that lets real estate agents pitch their services to home sellers, has launched a sister service that will allow agents to compete for buyers by submitting suggested rebate offers.
UpNest, which officially launched in California and Washington today, suggests to agents the size of the rebate they might offer after analyzing the online forms buyers fill out when they sign up for the site.
Agent offering commission rebate image via Shutterstock.
The forms ask buyers about their price range, financing status and readiness to buy, and also offer them the ability to let agents view their social media profiles. In addition, the site takes into an account an agent’s experience, the services she offers and the rebates provided by other discount brokerages in the buyer’s area of interest.
If a buyer is preapproved for a mortgage, hunting for an expensive home and has connected her LinkedIn profile to her sign-up form, the site would suggest that agent subscribers offer a more generous rebate. But if a buyer is just starting their home search, it would recommend a smaller rebate.
To pitch a prospective buyer, an agent must choose one of three suggested rebates and submit a proposal that includes a written pitch and an optional voice greeting. The proposals contain an agent’s profile information, which can include a link to the agent’s LinkedIn profile and Yelp reviews.
The site charges agents 15 percent of their pre-rebate commission if a referral generates a sale.
UpNest aims to tap a group of buyers that it believes are underserved in today’s evolving marketplace, said founder and CEO Simon Ru.
The success of Redfin and emergence of next-generation brokerages that are following in its footsteps has piqued awareness of discount brokerages and fueled a thirst for rebates among buyers, he said. Many believe that they shouldn’t have to pay a traditional commission because they’re handling more of the legwork in the home search process, he said.
“In the past an agent would drive you around and tell you, ‘Oh, these are the properties on the market,’ ” Ru said. “Today, savvy consumers are getting that on their own. They don’t need agents to provide that service.”
That said, many consumers still crave the level of attention they receive from agents at traditional brokerages.
Discount brokerages, Ru said, “have to serve a lot of customers in order for them to stay afloat, so consumers won’t be able to get white-glove service.”
Ru believes that UpNest will be able to attract these buyers by connecting them with full-service agents who are willing to give up some of their commission for high-quality clients.
The success of LessThan6Percent shows that agents are willing to accept that trade-off, Ru said. He said 900 agents have signed up for the platform since its launch last year and the site should be profitable by the year’s end.
Agents pay money to nab clients in one way or another, he said.
While they may not fork over cash directly to buyers after closings or pay referral fees, he said, they may end up still spending the same amount of money on marketing.
“They see that our return on investment is higher than the return that they get from advertising,” Ru said about LessThan6Percent’s partner agents.
Ru also claims UpNest beats advertising on listing portals like Zillow, Trulia and realtor.com.
“You spend money buying all of these leads, and then you have to pick up the phone and chase after them,” Ru said. “On our platform, the buyer wants to talk to you.”
Why would that be?
Ru said UpNest is able to drum up superior leads through a cocktail of marketing tactics involving analytics, paid search, search optimization and social media advertising, among other ingredients of what he calls UpNest’s “secret sauce.”