Multiple factors go into buying or selling a home, including location, the condition of the residence, and its age. The formula hasn’t changed much, which struck Thea Tuto, a licensed real estate agent since 2015, as an opportunity.
Last year, she and her team launched RealtyOffer, a digitized bidding platform that connects buyers and sellers to agents who have pre-negotiated commission rates. In one instance, Tuto, CEO of RealtyOffer in Northville, says an agent agreed to drop their commission by 1.5 percent, leading to a savings for the buyer of $11,500 on the sale of a $750,000 home.
“In this situation, the buyer used the savings to help cover various closing costs, while another buyer might use the savings to add home furnishings,” Tuto says. “In another instance, a client sold her home, purchased another residence, and saved $2,500 on the sale (the result of a 4 percent commission) that was used toward the closing costs.”
Buyers and sellers who use the platform — an app is in the works — don’t pay a thing; RealtyOffer, which has eight employees, with plans to hire more, drives revenue through a monthly fee agents pay based on geographic reach. The service is available in Wayne, Oakland, Macomb, and Washtenaw counties. Plans are to expand the platform across Michigan this year and establish operations in two more states in 2023.
“Our goal is to be across the country,” Tuto says. “Each week our website traffic is getting more unique visitors, and we’re seeing more deal flow. I think the housing market will open up once COVID-19 begins to fade. We’re looking forward to a busy spring market.”
Younger buyers are the largest users of the service. “We’re focusing on millennials because they love technology, which is why they make up a majority of those using the bidding platform,” she says. “Overall, we were concerned how the platform would be received by agents and brokers, but you have to spend money to make money. We’re giving agents an opportunity to make a bid on our platform.”
Here’s how it works: At the start, the digital service allows homebuyers and sellers to specify their needs through the purchase or selling experience. Next, agents in the area may choose to lower their commission rate for a seller to bid, or they could help the buyer and offer part of their commission to use toward the buyer’s closing costs. From there, homebuyers or sellers are sent three bids from matched agents, and they can select the agent that gives the best offer.
“We’re bringing more transparency to the residential marketplace, and in this way, everyone wins,” Tuto says.