Miami real estate technology startup Richr has announced the launch of its first product — a home listing platform that allows sellers in South Florida to put their homes in the Miami multiple listing service for free through a one-year, no-fee listing agreement with one of Richr’s participating brokerages.
Richr currently only operates in Palm Beach, Broward, and Miami-Dade counties. To begin, sellers must create a profile and provide all listing information, such as their address, housing type, and the number of bedrooms and bathrooms. Sellers are also required to upload photos and write a description, and then Richr will pre-populate public information gathered from Zillow to complete the listing.
From there, the listing is sent to one of Richr’s participating brokers, who will review the listing with the seller, provide a comparative market analysis to help set the sales price, and sign a no-fee listing agreement. Once the agreement is signed, the broker will list the home on the Miami MLS.
Throughout the process, sellers are prompted to follow Richr’s homeselling guide, which helps them understand how to market their home, how to plan and conduct open houses, how to field offers from interested buyers, and how the closing process works.
The sellers’ contact information is on the listing, and they’re only required to pay a commission if the buyer is represented by an agent. Richr recommends sellers offer a commission of at least 2 to 3 percent to “motivate agents to bring their buyers to see your home.”
Richr founder and CEO Glenn Orgin says his platform not only provides savings for sellers, but it provides brokers with the opportunity to turn a seller into a buyer.
“Once someone becomes a seller, they’re likely to become a buyer,” he said. “We capture all of the information and deliver it immediately to the broker. All the broker has to do is list their house on the MLS and then court them as a future buyer by providing exceptional service and helping them keep more of their equity.”
Orgin told Inman Richr has already received listings “in the triple digits” since its launch, but that the initial success hasn’t been without some roadblocks.
“I’ve been talking to all the owners, and they’ve been trying to see if there’s a catch,” he said, while explaining that owners have a hard time believing they can sell their home for free. “No one expects a service like ours to be free, but this is possible due to our liberated roadmap of making money through unique financial products rather than on the listing itself. ”
Orgin, who moved from London to Miami with his wife in 2009, said he was shocked by the number of fees Americans paid to buy and sell homes. In England, he said, the average commission is one percent.
With that in mind, Orgin plans to expand Richr’s offerings to include a co-investment and co-ownership platform by 2020.
On the co-investment side, buyers will be able to come to the platform and be matched with an investor, who will fund a down payment in return for a portion of the home’s future equity. Homeowners could also use the platform as an alternative to securing a traditional Home Equity Line of Credit (HELOC). In this scenario, owners would be matched with an investor who would provide capital in return for a portion of the home’s future equity.
Another real estate startup designed to let investors buy fractional ownership of properties, RealtyShares, announced in November that it was laying off staff and no longer accepting new investments. In an email to investors, the company attributed the move to its inability “to secure additional capital.”
On the co-ownership side, Richr would acquire a home on behalf of an investor, and the buyer would sign a lease with an option to have the first right of refusal to the home after 12 months.
Richr will charge a nominal fee to do the due diligence for the buyers, owners, and investors, Orgin explained.
But even that isn’t the end of what Orgin has planned for Richr — he says he eventually wants to open a brokerage that makes homebuying and selling a free, one-click process. Instead of relying on commissions to create revenue, Orgin says he’ll focus on providing stellar financial products and home services.
“If you can support a client from the finance side, then you can pretty much deliver exceptional service,” he said, explaining that his future brokerage would be an end-to-end online platform that would integrate with existing title, mortgage and home insurance services, and provide the needed appraisers and attorneys to get the deal done.
He even plans to credit buyers the three percent commission payable to Richr as a buyer broker, at closing.
“If the travel industry can turn itself on its head and provide all the tools to a traveler, why couldn’t the same thing happen in the real estate space?” he said. “And I realized why — if your North Star is to make money from the transaction, you’ll never innovate or disrupt the real estate market.”