A startup called Clever Real Estate is attracting investors with its discount-driven model for pairing homeowners looking to sell with real estate agents.
The company announced that it raised equity capital in a $3.5 million Series A funding round, Inman reported. The round followed $1.5 million of seed-capital investment in Clever, a “paper brokerage” based in St. Louis, Missouri that began operating in May 2017. (A “paper brokerage” is a company that’s licensed as a brokerage in order to access listings feeds but doesn’t provide brokerage services to its clients.)
Clever promises prospective sellers a discount in commission fees and refers them to its allied agents for a 25 percent referral fee, which is payable only if a transaction closes.
Clever charges sellers a 1 percent listing fee or $3,000, whichever is lower, before referring them to an agent that’s partnered with Clever to represent them in the sale. The seller is still on the hook for the buyer’s agent’s commission, which is typically in the range of 2.5 to 3 percent. In total, sellers who use Clever only end up paying a commission of 3.5 to 4 percent, instead of the industry standard of 5.5 to 6 percent.
So far, Clever has delivered leads to 5,000 agents, said Ben Mizes, the Founder of the company, which has relationships with brokers as well as individual agents. He said about 25 percent of the company’s customers are agents of Keller Williams Realty brokerages.
Read more here
Join us in Madrid, November 12-15 for the Global Online Marketplaces Summit.