SoloPro, a real estate 2.0 brokerage which began its business by delivering unbundled services from agents at flat rates, has modified its offering further to challenge the commission structure and appeal more to consumers.
The United-States-based company says it has facilitated more than 100 fee-for-service exchanges between agents and consumers so far, and that more than 800 agents in 36 states have joined its platform.
It has secured $1.6 million in funding and an undisclosed strategic investment from the venture arm of home improvement chain Lowe’s to fine tune its business model.
SoloPro initially set up shop on the premise that home buyers and sellers have no choice but to use all the services of a real estate broker or none of them at all.
In addition realtors were traditionally compensated with commissions even though most professionals like lawyers and doctors operate on a fee for service basis.
With SoloPro, agents unbundle their services, enabling buyers to customise their experience by selecting only the services they need based on their specific circumstance.
Real estate agents meanwhile charge flat fees for their unbundled services so home buyers and sellers only pay for what they need.
The offers are set at so called rock-bottom prices designed to “blow up” agent commissions.
SoloPro's latest offering however enables a return to bundling for some services into package deals where consumers can delay payment until just before a transaction closes.
Based in Durham North Carolina, the business has also restructured the way it allows agents to advertise prices for individual services such as showings.
This previous model required consumers to contact each agent separately, so if an agent was tied up at the time a SoloPro user was trying to secure their help, it could result in a significant bottleneck.
SoloPro now fixes its own specific values to each of an agent's services in an attempt to expedite the process for consumers.
In addition the company recently began offering both a la carte and bundled services to sellers as well as buyers.
If a buyer purchases SoloPro’s bronze package ($999) an relevant agents is contracted to list one home and coordinate one transaction. If the buyer selects the gold package ($1,399), the agent will also host an open house and attend the closing.
Buyers and sellers who connect with agents on SoloPro pay SoloPro for an agent’s services, not the agent or the agent’s broker directly.
In order to comply with real estate laws, SoloPro then passes those fees on to the agent’s broker, rather than the agent. It’s then up to broker and agent to decide how to split the fee, if at all.
SoloPro originally took a 10 per cent cut of the cost of every service it facilitated, but according to Inman.com, CEO Tommy Sowers has removed those fees — though it has plans to reinstate them in the future.
“Real estate laws in many states prohibit anyone without a real estate license from collecting a referral fee,” Inman reports.
“That may be one reason SoloPro, which is not sponsored by a licensed broker (and is, therefore, not a brokerage), has backed off that revenue model for now."
The startup has spent more than $100,000 on a commercial that illustrated its desire to 'blow up' real estate commissions.