Open Listings, a real estate site that offers homebuyers a 50% refund on the fees their real estate agent would have received, raised $6.5 million in a Series A round of funding and plans to use the money to expand its operations.
According to TechCrunch, Matrix Partners led the funding, along with Initialized Capital and Arena Ventures.
So how does Open Listings work?
TechCrunch has the details:
As a refresher, Open Listings is an end-to-end real estate platform for buyers – meaning you can find a listing, book private showings, make an offer and complete all the necessary paperwork prior to sale.
So how does Open Listings do these things without needing an agent? The answer is that the startup actually does use agents, but has segmented much of the process so agents only handle very specific steps of the transaction, resulting in big savings for the startup, which are passed on to the buyer.
Basically, as TechCrunch describes it, Open Listing uses real estate agents who want to earn some extra money in their free time to simply show the properties.
Then, once the buyer is ready to make an offer, the buyer is paired up with an “in-house agent” who will help in the negotiation process.
All that apparently results in a much lower cost for the buyer, manifested in a 50% refund on the commission that their real estate agent would have recieved for aiding them in the deal.
According to TechCrunch, the company is currently licensed to operate in California and Washington, and plans to add two more states this year.
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[Correction: This article is corrected to accurately reflect how real estate agents are paid in a traditional real estate deal.]