Real estate startup AgentPair has joined a vanguard of companies that allow buyer’s agents across the U.S. to compete for clients based on rebates they offer on their commissions.
Given that sites like Zillow, Trulia and realtor.com have made the home search process better, faster and more efficient for consumers, AgentPair is out to give agents the opportunity to bid to offer commission rebates to reward homebuyers’ tech-aided legwork, AgentPair CEO Clark Giguiere told Inman News.
DoorFly.com and RealtyBaron have flown similar models for years. AgentPair, seller-focused LessThan6Percent and its buyer-focused sister site, UpNest, are newbies in the space and represent updated versions of the model.
AgentPair is much more than just a bidding platform, however. It includes an amalgam of features that other recent real estate startups have highlighted including a Lasso-like agent-homebuyer collaboration platform and a mobile app to help consumers find agents nearby similar to Curb Call and others.
AgentPair also features a social media-style feed that allows agents and buyers to see what the other is doing on the platform and what is happening in specific cities they choose to follow.
Still, it’s the auction-like ingredient that makes AgentPair stand out, Giguiere said.
The AgentPair platform gives agents at traditional brokerages a tool to compete with tech-savvy firms such as Redfin, which offer commission discounts to clients thanks to their technology-assisted, streamlined real estate process, Giguiere said.
The platform also gives consumers a way to secure a rebate on a buyer’s agent commission, which traditionally measures between 2 and 3 percent of a home’s sale price.
Seller’s agents traditionally receive between 5 and 6 percent of a home’s sale price as compensation for the work they do to usher a deal to completion. Typically, a seller’s agent splits that commission with an agent who brings a buyer to sale.
In 2013, for example, firms in Realogy’s franchise network, which includes the Coldwell Banker Real Estate, Century 21 Real Estate, and Better Homes and Gardens Real Estate brands, averaged a 2.54 percent commission rate per side, according to Realogy’s full-year 2013 financial statement filed with the U.S. Securities and Exchange Commission.
To join the AgentPair network, agents apply, select up to five target ZIP codes and pay a $50 fee each time they secure a home tour through the platform.
In California and Florida, AgentPair is a brokerage licensed under the name AP Realty Services Inc. But the company has no agents and doesn’t plan to have any, Giguiere said. The license allows the firm to possibly capture commission-tied referral fees if it chooses to do so in the future, he said.
UpNest, the buyer-focused, agent-bidding site launched by LessThan6Percent in May, is a brokerage and charges a 15 percent referral fee on deals agents close with clients won through the platform.
Bidding for buyers
Homebuyers can pull in listings from Zillow, Trulia and realtor.com — the three most popular real estate sites on the Web — to the AgentPair platform by entering the listing’s Web address using the “Add Home” button on the site. They can also add the tool to their browser, which allows them to pull in listings from the three sites with the press of a “bookmarklet” button.
The listings populate a “Homes and Bids” section of a buyer’s AgentPair profile. From there, buyers can request bids from agents, either by location — ZIP code, city or county — or from any agent on the site.
Consumers can request bids for specific homes they have pinned to their AgentPair profile from Zillow, Trulia and realtor.com.
Homebuyers can receive bids from an unlimited number of agents on AgentPair. As soon as an agent responds with a rebate bid, a notice with their bid amount, a link to their AgentPair profile and a message button show up under the listing in the consumers’ “Homes and Bids” page.
Agents’ AgentPair profile pages also have a matchmaker function. If consumers have tied their AgentPair account to Facebook, they see how they’re connected to the agent, based on shared Facebook friends and interests.
In the future, Giguiere envisions fleshing out the AgentPair agent profile pages to include even more information, including Yelp reviews.
Agents can’t see how many bids a consumer gets on a certain home, Giguiere said, but they have access to an AgentPair calculator that helps them quickly determine what might be a reasonable rebate on any given home.
Until a bid is accepted, an agent can retract it. After a consumer accepts a bid, agents must certify that they commit to it and then the two set up a time to tour the property.
The bid request stays open until a consumer selects an agent for a home tour. Once a tour has been completed, the agent pays AgentPair $50.
The platform is also designed for collaboration, allowing agents and potential clients to communicate privately through the platform and also publicly via the site’s news feed.
Users can follow one another, as well as specific cities, to see all the public AgentPair activity in the news feed. When a consumer requests a bid, for example, the request will show up in the news feed.
The mobile app, which comes in both iOS and Android versions, helps consumers request showings from agents near them.
In map view, consumers see all the AgentPair agents near them who have their availability set to “on.” They can select one and request a tour directly, or they can send a request for all agents nearby.
Depending on the concentration of available AgentPair agents, the request will extend to the ZIP code, city or county level, Giguiere said.
When consumers send out an at-large tour request, the first agent to respond gets the lead, Giguiere said.
Is auction-style lead gen a sustainable model?
Sites that allow agents to hawk their services based on rebates and lower commissions, like DoorFly.com and RealtyBaron, have been around for years.
RealtyBaron hasn’t updated its site in a while, said Marc Dugger, founder and CEO of RealtyBaron. Its agent-bidding feature now lies dormant, he said.
That’s mainly because the firm, which was launched as a seller’s agent bidding site in 2005 and added a buyer’s agent bidding component in 2009, shifted gears after the housing crash, Dugger said.
RealtyBaron saw some success as a consumer-focused bidding site, but it was a challenge to serve both consumers and agents, Dugger said. In some markets, it would have lots of consumers looking for bids and not enough agents. In others, it was the opposite.
Prior to the housing bubble’s pop, high sales prices and high activity made the bidding model more attractive to both agents and consumers, Dugger said. Since the bust, that demand has deflated.
So, the firm flipped its founding model on its head.
Now both buyer’s and seller’s agents bid on RealtyBaron for access to instantaneous leads it drums up from its mobile apps — RealtyBaron, RealEstateAnswers and RealEstateListings — and its partnerships with sites like MLS.com, homethinking.com and experthomeoffers.com.
The agent who indicates he or she will pay the highest flat fee for the lead in any location gets the lead, Dugger said.
However, the agent-bidding engine still exists within RealtyBaron, and the firm may reactivate it if the market continues to heat up, Dugger said.
Neither DoorFly.com nor RealtyBaron have taken off as consumer-focused agent-bidding sites, but LessThan6Percent has seen some traction in its 18 months. It, AgentPair and UpNest could represent a new wave of agent-bidding sites that could take hold in the industry.
In January 2013, LessThan6percent launched in the San Francisco Bay Area, and now operates in seven markets, including Portland, Oregon; Sacramento, California; the San Francisco Bay Area; Los Angeles and Orange County; San Diego; and Washington, D.C.
Currently, more than 900 agents are signed up for the platform, Simon Ru, LessThan6Percent’s founder, told Inman News.
Sellers on LessThan6Percent enter an address and within 24 hours the site coordinates proposals from at least three agents, Ru said. The proposals include information on agents’ commission rates, but they also provide their years of experience, marketing tools they use and their Yelp rating, allowing consumers to review that info side by side.
In some ways, the commission rate fades a little into the background as the process becomes more like a “request for proposals,” a pitch process standard in many industries, Ru said.
In addition to quantitative info, like how many open houses agents will hold, their contract length, their showing strategy and other marketing details, the proposals include answers to the qualitative question: “Why should I hire you?” Ru said.
LessThan6Percent and UpNest are more like directories than bidding sites, Ru said.
LessThan6Percent is licensed as a brokerage in California and collects a 30 percent referral fee on deals it refers to seller’s agents. UpNest charges buyer’s agents 15 percent of their commission on deals it feeds them.
UpNest launched in Washington and California in May and aims to piggyback on the success of LessThan6Percent, Ru said.
UpNest suggests a rebate size to agents based on the online forms buyers fill out when they sign up for the site.
In addition to the rebate, UpNest prompts buyer’s agents to answer just one open-ended question for potential buyer clients: “Why should I hire you and not another agent?” Ru said.
RealtyBaron’s Marc Dugger predicts that agent-bidding sites will become popular again as the housing market continues its rise.