SRE Matrix — a hybrid brokerage that’s secured more than $200 million in funding from a billionaire investor — has launched a nationwide property search site, with plans to feed leads to more than a hundred partner brokerages around the country.
The brokerage’s website currently covers 37 states. But SRE Matrix holds broker licenses in 48 and will soon expand coverage to all 50, according to Rob Young, executive vice president of SRE Technologies, SRE’s parent company.
SRE Matrix employees a handful of salaried agents in Hawaii, Los Angeles, Arizona, South Carolina and Tennessee.
SRE Matrix’s listing search results pages show dollar estimates of the rebates that buyers would receive if they used SRE Matrix.
The company plans to hire in-house agents in other markets, but it will expand digitally to many others through partnerships with local brokerages.
These partner brokerages, which SRE Matrix calls “alliance agencies,” will service referrals from SRE Matrix using SRE Matrix’s business model, which will require charging low fees and employing SRE Matrix’s proprietary technology platform.
Young wouldn’t provide details on the business relationships between SRE Matrix and alliance agencies, saying the agreements can vary on a case by case basis.
Redfin and Movoto are among other nationwide brokerages that use in-house agents in some markets but act as “paper brokerages” in others by funneling business generated by their websites to local brokerages for referral fees.
Plans to spend millions on listing portal ads
Still young, SRE Matrix will need to spend heavily to drum up leads for its alliance agencies.
In addition to investing in search engine optimization and advertising for its website, that will mean sinking what Young described as “significantly more” than several million dollars into other forms of digital marketing — including ads on Zillow, Trulia and realtor.com.
“As this year goes by, you’ll see us escalate that where it’ll be pretty noticeable,” Young said of SRE Matrix’ planned investment in adverting on listing portals.
SRE Matrix’s website offers features commonly found on many real estate sites.
But one feature that sets it apart from many others is the commission rebate estimates that the brokerage tacks onto listings. They show the estimated dollar value of the rebate that buyers could expect to collect if they used SRE Matrix to buy.
The business model
SRE Matrix pockets a 1 percent fee for representing homebuyers, rebating the rest of the buy-side commission to clients. It typically charges sellers anywhere from a 2 percent to 4 percent commission, collecting a 1 percent fee for itself and paying the remainder to buyer’s agents.
SRE Matrix previously advised seller clients to offer 1 percent commission to buyer’s brokers. But like many hybrid brokerages, the firm has stepped back from this strategy somewhat — presumably to coax buyer’s agents into showing its listings more often.
While SRE Matrix still often pays less than a 2 percent commission split to buyer’s agents in Hawaii, the brokerage now advises seller clients to offer a competitive rate to buyer’s agents, which can range from 2 percent to 3 percent in some markets, such as Phoenix, Young said.
SRE Matrix has improved its software and business model in recent months, Young said.
Concierges qualify and distribute leads to agents, while SRE Matrix agents provide the full range of traditional brokerage services. Concierges also remain “an advocate and guide” for customers throughout a transaction, making introductions to partner vendors, including mortgage and title companies.
The concierge model, Young said, resonates with SRE Matrix’s sole investor, billionaire Takeshi Sekiguchi. Sekiguchi is a resort developer who views SRE Matrix as “his baby,” Young has told Inman.
SRE Matrix also polished off a proprietary agent tech platform developed by a team of more than 20 engineers led by Lucas Haldeman, a former product manager at realtor.com operator Move Inc., Young said.
The platform covers lead management, routing, tracking and communication (text, email and phone), as well as task and transaction management.
SRE Matrix wants to connect this system with online closing tools used by vendors, including partner lenders.
“From a consumer perspective, you don’t really know when you’ve left SRE and entered” the mortgage-application software of a lender, Young said.
SRE Matrix is also working on launching an in-house mortgage division, a fairly common practice for large brokerages.
Like Redfin, SRE Matrix is trying to achieve an unusually high level of integration between its brokerage business and coming lending arm, with the aim of helping streamline the buying process for clients.
