Open Listings is a startup fresh out of the current Y Combinator batch that’s easing the home buying process by letting people move forward without real estate agents.
Because two-thirds of the overall residential market involves repeat buyers, some people may not want to rely on agents because they’re already familiar with what to do. So instead, Open Listings will refund the 3 percent agent commission, which can amount to tens of thousands of dollars here in California, and charge a flat fee instead. It’s basically a self-service platform with on-demand human experts.
Their belief is that the Internet is diminishing the role of the real estate agent by making it a lot easier to find homes, but commissions are getting out of control as they rise with the overall (insane) cost of real estate. (I’m mostly referring to California, which is Open Listings’ first market and makes up about 15 percent of national home sales.)
“With technology today, you can find the house you want and know the price is good. But what you can’t do is buy the house without an agent,” co-founder Judd Schoenholtz said. “You’re doing 80 percent of the work, but you’re required to have an agent present.”
If you want to use Open Listings, you can start with or without a home in mind. They have an app that generates a personalized feed of listings. Alternately, you can do research with the plethora of other sites and apps. An in-house team can schedule in-person showings and show you what the house should be competitively valued at.
If you do have a house in mind or you’ve chosen one through Open Listings, you can create an offer from their site and submit it to the seller. Using the software is free; they’ll only charge you if you actually make a sale and it’s a $5,000 flat fee.
“It basically should be like filling out forms on TurboTax,” Schoenholtz said. “But if you want to call, and have us guide you through it, we also do that too.”
Schoenholtz said the company isn’t really competitive with OpenDoor, another company that just raised $20 million. That company, which was co-founded by investor Keith Rabois and Trulia alum Eric Wu, is more focused on sellers in underserved markets that aren’t seeing the same level of activity or heat as coastal California.
Schoenholtz and his co-founders Alex Farrill and Peter Sugihara came together after they bought three homes themselves. Farrill had a horror story after his agents got switched in the process of buying the home, which made the sale much more complicated.
Alex was a chief data scientist at RUN, an ad platform that was acquired last year by Publicis. Judd headed the user experience department for the digital agency Huge in Los Angeles, while Peter was a software engineer at Amazon.