Home listings startup launches in South Florida
Company plans to introduce investment platform next year
A startup that takes the real estate agent out of the deal recently launched in South Florida with plans to expand throughout the state and to New York, California and other states.
Richr.com, a real estate technology platform, will list homes in the tri-county area on the MLS for free, “But we’d like to help you find your next home,” said founder and CEO Glenn Orgin.
“Once someone becomes a seller, they become a buyer,” he added.
If a buyer is represented by an agent, the seller would still pay the agent’s commission. Richr is not a brokerage, but will work with various brokerages, Orgin said.
After owners list their homes using Richr, the website guides them to plan open houses and viewings, select a buyer once they receive offers, navigate paperwork and close the deal.
The idea is that home sellers would take the 3 percent they save on the seller’s fee and invest it into their next purchase. If a buyer doesn’t have an agent, the seller could keep the full 6 percent.
Orgin believes that the stagnant residential market will also push sellers to look for ways to save money.
Some brokerages have aimed to cut costs for sellers by charging a flat fee rather than a commission, including Miami-based Home61,
San Diego-based Home Bay and Purplebricks.
Richr plans to launch an investment platform in 2020, allowing owners to cash out of equity in their homes or have investors finance a portion of their down payments in exchange for equity. The co-investment/co-ownership model doesn’t affect homestead exemption, Orgin said, and it’s similar to those offered by startups like San Francisco-based Point, which buys equity from homeowners and then cashes out when they sell.
Orgin got the idea for Richr in 2009, when he and his wife moved to Miami from London and were trying to buy a home. “I was shocked by the substantial fees paid by the seller to find a buyer,” he said. In England, the standard commission is only 1 percent.
Richr has raised $500,000 from the Wynwood-based Faith Group and is looking to raise another round in the months to come. It worked with Fueled, a New York-based venture development firm, to build the website.