A new discount-brokerage firm, spyRealty, has launched in New York and Massachusetts, offering homebuyers a 2 percent refund off of the purchase price of a home.
Ben Chudnovskiy, managing partner of spyRealty, which currently has seven agents, was not a spy in his former life (at least, he’s not saying so if he was) — he’s just a normal, New York guy and Massachusetts-licensed real estate broker — but he’s looking to follow large online broker Redfin’s model, which originated as a discount real estate service for tech-savvy homebuyers.
And competition is enormous, said Chudnovskiy, which prompted the idea in the first place. "With 45,000 licensed real estate agents in Massachusetts, I thought, ‘How can we compete?’ One way is to be first."
While spyRealty isn’t the first brokerage to experiment with this model, Chudnovskiy believes it’s among the only companies in the region offering a 2 percent brokerage fee refund. He thinks the model can be profitable because of the amount of inventory in the housing market, which offers the possibility of low-margin, high-volume business.
"We aren’t the broker for everyone," said Chudnovskiy, as the company is intended for independent consumers who take an active role in the home-search process.
Prospective homebuyers must agree to view open houses unaccompanied by an agent. When they are ready to buy, a mandatory license disclosure must be signed, and spyRealty would become 100 percent involved from that point forward in getting the deal done, said Chudnovskiy.
SpyRealty refunds the whole buy-side commission of a sale minus its fee, which is at least 0.25 percent of the purchase price or $2,000, and has plans to expand into other regions of the U.S.