For listing and selling a home on behalf of a homeowner, most real estate agents charge a fee, which is frequently up to 6% of the sale price of the property.
This fee comes to slightly over $10,000 for a house that sells for roughly $170,000. It comes to $30,000 for a house that sells for $500,000. And the commission for a property that sells for $1,000,000 would be $60,000. You see what I mean. The commission can account for a sizeable portion of any gains from the sale of a property, depending on how much equity the seller has.
It can be even tougher to justify giving up so much money in commission in housing markets when there is a dearth of inventory and homes are selling quickly. Many homeowners would still enjoy the opportunity to advertise and sell their properties themselves, with a little assistance from real estate agents, despite the fact that certain websites, like Redfin, offer reduced commissions.
Enter HomeLister, a real estate and digital brokerage platform that enables homeowners to market and sell their homes online while receiving help. Giving sellers more control over the sales process and a chance to retain as much of their equity as feasible are the ultimate goals. HomeLister claims that by automating the sales process, it “fixes the cost of the sell-side agent,” enabling sellers to save an average of $21,000 and cutting the median days on market from 16 to 9.
Following her personal home-selling experience, firm CEO Lindsay McLean founded the Santa Monica, California-based business in 2015 with attorney and real estate broker Jennifer Stein.
“I bought my house with the assistance of a superb agent. However, I ended up handling the most of the work for the sale, including making ready for showings, scheduling showings, looking up nearby house sales comparables, and determining the original sale price, says McLean.
Her house was purchased at the price she specified in a double-ended contract, allowing her real estate agent to keep the full 6% commission. The sale took place in less than a week.
“In the end, I paid a commission that exceeded 25% of my closing equity in the form of a cheque. McLean, a software engineer and real estate entrepreneur, said to TechCrunch, “It blew my mind. Despite being fantastic, my agent wasn’t truly worth 25% of my equity for 15 hours of effort. The economics of using a typical agent to make a transaction startled me and made it seem terribly unfair. To gain that equity, I had put a lot of effort.
Many people think the outdated paradigm of an agent getting a 6% fee is outdated. It follows that the firm has attracted investors and homeowners alike. HomeLister claims to have assisted in the sale of more than 3,750 properties totaling over $1.9 billion in transactions, saving its clients a combined estimated $77.5 million in equity. Today, the business announces that it has secured $10 million in a Series A round of fundraising that was jointly led by M13 and Homebrew, bringing its total capital raised to date to close to $15 million.
Currently operating in 17 states, HomeLister intends to enter six more in 2022, including South Carolina, Illinois, and Michigan. The ultimate aim is to cover all 50 states.
So how does it function? A system will guide a homeowner through the listing procedure when they enter their address on the HomeLister website if they desire to list their house there. Customers who choose its basic plan are on a free list and pay $599 when they sell their house. Depending on the quantity of help a customer wants, the firm also provides premium and platinum plans that may cost up to $2,999. A la carte services can be added, including transaction management, 3D walkthroughs, professional photography, having an agent analyses an offer and handle all the paperwork associated with the sale, and internet advertising campaigns. Its services are fully virtual and online.
The biggest difference with the premium package, according to McLean, is that you have a real estate expert leading you from beginning to end. This person will assist you with pricing your house, developing a strategy, negotiating bids, and answering any concerns along the way.
Despite the company’s refusal to provide specific sales data, McLean claimed that between 2020 and 2021, revenue surged “by over 3x” and market share increased by 450%.
HomeLister intends to upgrade its present offering and add new services to its website, such as title services and automated transaction administration, in addition to expanding geographically.
The majority of sellers now contrast us with conventional realtors, and some do so with low-service flat cost MLS suppliers that list you and then disappear, according to McLean. The very best of both worlds is HomeLister. You are guaranteed a flat charge that is based on the amount of work we complete, not the value of your house, and you receive as much assistance as you require during the process.
In a written statement, M13 partner Karl Alomar stated that the recent years have seen a robust seller’s market for homes, with demand far outpacing supply.
The typical brokerage business, he added, is inefficient and expensive, making it a model that is ripe for disruption. “This time of swift sales has clearly proven that,” he said. HomeLister tackles this problem with a well-thought-out and worthwhile digital solution that has a lot of seller traction and ample breathing room for development.
Real estate is frequently the greatest asset for the majority of individuals, according to Satya Patel, a partner at Homebrew.
According to a written statement from him, “HomeLister is redesigning the house selling process to ensure that sellers maintain as much of their equity as possible, which should eventually assist purchasers as well.”