Adam Levin, a prominent labor attorney, wanted to sell his expensive home in the upscale Los Angeles-area beach town of Manhattan Beach. After interviewing a few listing agents — and ignoring their advice — he had a real estate revelation.
Levin didn’t agree on the agents’ pricing suggestions and realized pricing his home lower to facilitate a quicker sell was in the agent’s best interest, and not necessarily his. So he priced his home at the higher end and the listing practically sold itself.
Why aren’t home sellers controlling the sale of one of their biggest assets? And why do agents collect such a hefty sum for such little work? Those are two questions he posed to an acquaintance, real estate broker-owner Courtney Poulos.
Courtney Poulos
“I realized he was right,” Poulos, 37, told Inman. Sellers, especially those with high-end homes, don’t need to pay a 5 percent commission rate to get their homes sold, especially in the blazing-hot Los Angeles market, Poulos said.
Poulos, who owns the 13-agent Los Angeles-based firm ACME Real Estate, and Levin teamed up to design and launch Evolution Real Estate, a firm tailored to high-end sellers who want to remain in the driver’s seat of their home sale by offering them real estate agent services on a per-hour basis.
Levin, a co-founder of the new firm, serves as general counsel and handles contract management for Evolution Real Estate.
Adam Levin
Sellers won’t pay more than $1,000 per hour, and the fee will vary by the home and the specific needs of the client, Poulos said.
The fee-for-service brokerage model is not new — neither is charging real estate clients an hourly rate –but it’s rare.
Some startups are looking to push real estate more toward the a la carte model. For example, SOLO, which launched earlier this year and is currently on the hunt for funding, connects homebuyers who want to pay for real estate agent services on an a la carte basis with agents.
Poulos estimated that a reasonably priced home takes about 30 hours of an agent’s time from list to close.
That estimate includes the time it takes to do everything a listing agent typically has to do to get a home sold: Hire a photographer; produce marketing materials; place the home in the multiple listing service and online portals; get media coverage if the house is notable; host separate, catered open houses for brokers and buyers; negotiate the contract; facilitate the closing; make sure contingencies are met; and conduct a transaction audit.
Sellers can hire Evolution Real Estate to handle any one of those tasks, Poulos said. To ensure sellers won’t end up paying more in this different model, fees will be capped at the equivalent of 2.5 percent of the sales price, she said.
Evolution Real Estate, which currently has two agents, has soft-launched with its first listing: a $2.7 million home in the exclusive Oaks of Calabasas neighborhood that sits on the same street as the $2.7 million home that teenage reality TV scion Kylie Jenner recently purchased.
The sellers of that home hired Evolution Real Estate to handle the catered open house for brokers and to handle private showings. The sellers chose the photographer themselves and also handled the printed material and set the list price.
“It’s a volume model,” Poulos said. The firm will need to do a lot of deals to make it work, but she said she believes it will, calling the model a “no-brainer” for some sellers.
“We know the slam-dunk is the high end,” Poulos said.
If Evolution Real Estate takes off as she thinks it might, Poulos will explore franchising the model. In addition, she’s looking into ways to make it work at lower price points and even on the buy side.
The new business model may get some exposure on “My City’s Just Not That Into Me,” Poulos’ real estate reality TV show.