A new real estate start-up is aiming to revolutionize the home buying process by offering homeowners a full service brokerage online for a commission rate that’s substantially lower than the industry standard.
LevelRE, which launched nationally earlier this week, allows homeowners to list a property on its site for free and will also place a home listing with the buyer’s local MLS, on Realtor.com, Zillow, Trulia and other sites.
The site also utilizes “proprietary technology” to simplify the real estate process by giving customers the ability to list, price, search, bid, and negotiate in real-time from their laptop, desktop, tablet or smartphone, all with the assistance of licensed real estate agents and professional support staff, the company said in a release.
And it does all of this for a commission rate of 1% of the sales price.
Additionally, if buyers use LevelRE to find their home, they can receive a 1% rebate of the cost of the home.
“LevelRE aims to change the traditional process and commission structure Americans have grown accustomed to when they buy and sell their homes,” said CEO Todd Siegel, a real estate broker, lawyer and CPA. “This is most Americans’ largest lifetime investment and we see real value in helping home buyers and sellers save money by using cutting-edge technology to streamline the process.”
The company said that is uses several tactics to reduce costs, including:
- Using technology to speed up communications and transaction processing
- Enhanced communications and automation that allows the site to substantially reduce costs
- Reducing costs by empowering customers to help with the process
“LevelRE is not a do-it-yourself or discount service,” the company said. “It is a full service licensed real estate brokerage available to 90% of the US population. By decoupling the individual pieces associated with buying and selling, customers only pay for what they actually need.”
But despite what it may seem, agents aren’t cut completely out of the process. The site boasts its own licensed agents and “expert support staff” that are made available to buyers and sellers online or by phone to help “navigate all aspects of the home purchase process.”
And unlike most brokerages, the site said that it pays its agents a salary plus commission “so they are always incentivized to help.”
As part of limiting costs and allowing homeowners to take ownership of the process, the site offers homeowners an “a la carte” list of choices for selling their home.
“If a buyer wants to see your house, you will show it to them,” the site tells homeowners. “If you are unwilling or unable to do that, then we can show it for you for an additional fee where available. Same thing goes with an open house. We can help you set it up yourself, or we can do it all for you – just select the desired option from our online marketplace. Likewise, don’t pay for an expensive professional videographer or other service if you don’t need it. Only pay for the things you really need.”
For example, on the sale of a $500,000 property, LevelRE said that it could save a homeowner between $10,000 and $25,000 by using its platform.
“One size does not fit all. Is a 6% commission justified if your house sells the day after it's listed?,” the site asks its visitors. “Should you be charged for everything an agent may do for you when in all likelihood you probably don’t need all of those things?”
But the site does recognize the role that agents play in the process, considering that it does employ its own agents.
“It is important to note that most agents do work hard to sell your home, or to find you the perfect home to buy,” the site tells visitors. “After all, commissions typically are the only way they make money. Agent’s training and experience is invaluable when trying to navigate the complexities of real estate transactions. But, like any other business, agents have expenses and deserve to make a reasonable profit.”
LevelRE is based in Ft. Lauderdale, Florida. The company is backed by CrunchFire Ventures and the Miami Innovation Fund. The privately-held company was founded in late 2011, secured venture funding in 2013, and exited stealth-mode after completing its beta program in August 2014, the company said.
The company said its goal is to save consumers $1 billion in real estate commission in the next five years.
Click on the image below to see more on LevelRE's business model.