6 Tech Startups Revolutionizing Home Sales by Cutting Real Estate Agent Costs

Last year, a landmark court decision shook the real estate industry when the National Association of Realtors (NAR) settled multiple class-action lawsuits alleging that its practices unfairly inflated commissions for both homebuyers and sellers. Representing 1.5 million agents nationwide, NAR introduced new rules giving sellers more flexibility in how they pay their agents. Instead of the standard 5% or 6% commission of a home's purchase price, which typically covers both the seller's and buyer's agents, sellers now have more options to reduce these costs. However, many brokerages have found loopholes to maintain high commission rates, and recent data from NAR indicates that only 6% of sellers list their homes for sale by owner (FSBO), while 86% of buyers still use agents. This court settlement has reignited interest in startups aiming to disrupt the traditional real estate model. Here are six notable companies leading the charge: Galleon Founded and led by CEO Amanda Orson, Galleon is an off-market, for-sale-by-owner (FSBO) residential marketplace. The platform aims to create a free and open consumer-led marketplace where homeowners can set their prices and attract buyers directly. Unlike traditional platforms like Zillow and Redfin, Galleon eliminates the need for agents and brokers, potentially saving sellers thousands of dollars in commissions. Creating a listing on Galleon is free, but sellers can upgrade for $299 to include professional photography, a digital yard sign, and featured placement. A $899 package adds tools like a scheduling calendar, offer management dashboard, e-signing capabilities, and legal support. Galleon believes it supports a niche market of sellers who prefer to transact without an agent, and the platform is available nationwide for free to buyers. Listwise Nic Johnson, the founder of Listwise, is introducing a novel approach to home selling. On Listwise, sellers can specify their requirements for an agent, including desired experience levels and commission structures. Agents then bid for the opportunity to sell the home, offering competitive incentives such as cash bonuses and reduced fees. This competitive bidding model can significantly lower the cost for sellers while ensuring they find a well-suited agent. For instance, Kenneth Bloom used Listwise to sell two homes in Michigan, receiving cash bonuses of $1,200 and $1,040, respectively, and saving nearly $10,000 on broker commissions. Bloom found an experienced agent through the platform who helped him sell one home in just one day. Off-Markt Alison Bernstein, founder of Off-Markt, aims to help sellers manage the selling process more efficiently with a hybrid model. Off-Markt provides a suite of online tools and resources, including virtual staging, comparative market analysis, and document management, to assist FSBO sellers. The platform also offers access to licensed real estate agents for guidance, though the primary aim is to empower sellers to handle the bulk of the process independently. Bernstein believes this approach can help sellers save on commissions while still accessing professional expertise when needed. Redy Josh Altman, a well-known real estate agent from "Million Dollar Listing Los Angeles," cofounded Redy in 2020 to promote transparency and competition among agents. On Redy, agents can offer incentives like cash bonuses and competitive commission rates to win seller listings. This model directly invests agents in the sale process, providing them with opportunities to secure local listings and strengthen their market presence. Bloom, who used Redy, appreciates the streamlined process and the financial benefits. Redy's impact on reducing costs and improving the seller-agent relationship is gaining traction, especially in competitive markets. Ridley Tech entrepreneur Mike Chambers launched Ridley to support FSBO sellers with AI-powered agents. These virtual assistants can handle various tasks, from writing listing descriptions to booking photographers, at a fraction of the cost of traditional agents. Chambers lists his personal experiences selling a home without an agent, including the backlash from local agents, which inspired the creation of Ridley. Sellers pay a one-time fee of $999 or $1,999 to access Ridley's services and even an on-call lawyer. Chambers argues that advancements in technology have made the selling process more efficient, yet costs have remained high, and Ridley addresses this discrepancy by empowering consumers to save money while maintaining control. Turbohome Turbohome, founded by Ben Bear, operates a unique brokerage model that pays agents a salary instead of a commission-based income. This model ensures agents receive consistent pay, health care, and stable employment, making it attractive for those who prefer client-focused work without the pressure of financial uncertainty. Buyers have the option to pay a flat fee of $5,000 to $10,000, and the commission is credited back to them. Arnab Dutta, a Turbohome user, noted that his offer stood out because the seller did not have to pay his agent's commission, which helped his offer prevail in a competitive Bay Area market. Turbohome, launched in early 2024, has raised $3.85 million and currently operates in California, Texas, and Washington. Industry Insights The emergence of these startups reflects a growing trend towards disrupting the traditional real estate model to benefit home sellers. Despite resistance from established real estate players, these companies are finding niches and delivering significant savings. Galleon and Ridley cater to DIY sellers looking to minimize costs, while Listwise and Redy focus on creating a more transparent and competitive market for agent services. Turbohome’s innovative salary model and buyer-friendly incentives show promise in redefining agent-client relationships and market dynamics. As home buyers and sellers increasingly seek cost-effective solutions, these startups may play a pivotal role in reshaping the industry. Furthermore, the National Association of Realtors’ new rules, though initially designed to increase flexibility, have not fundamentally altered the commission structure. The continued dominance of traditional models highlights the need for innovative solutions to empower consumers. These startups are at the forefront of change, offering fresh perspectives and practical tools to navigate the real estate market. Their success could signal a significant shift in how properties are bought and sold, driving further innovation and cost reduction.