After the financial crisis, Chris Rediger started buying distressed homes and flipping them for a profit.
But his margins were hampered by brokerage fees, so Rediger learned to code, then built software that allowed him to streamline the process through an online platform, reducing his costs.
Rediger realized there were others like him who were looking to reduce the time and costs associated with buying and selling homes. He founded Denver, Colorado-based Redefy Corporation in 2011, which offers full real estate sales services, including agents, for a $3,500 flat fee on homes under $1 million – far less than the 3 percent commission that brokers typically receive.
Now, his company’s latest model is looking to cut down on costs even further by allowing homeowners to list their properties on the Multiple Listing Service directly or with the help of a virtual agent, rather than through a physical agent. Rediger said the new platform, RedefyDIY, appeals to homeowners who need to sell their houses quickly – similar to what for-sale-by-owner websites offer.
RedefyDIY just launched in Florida and Texas and allows buyers to directly list their home on websites like Zillow, Trulia, Realtor.com without a listing agent. The company, which is traded on the OTCMarkets for about $4 per share, plans to expand nationally. In June, it announced it was seeking to raise up to $6 million in capital through private securities.
By the end of 2018, the company had closed more than 6,000 real estate deals totaling over $2 billion, according to Rediger.
For example, for a $300,000 home, the seller would no longer need to pay a listing agent a 3 percent commission of $9,000 and instead pay RedefyDIY’s fee.
Like Redefy, more technology-centered companies are trying to disrupt the brokerage industry. Virtual brokerage eXp Realty has performed exceptionally well over the past couple years. At the end of 2019’s first quarter, eXp recorded $5.8 billion in sales — up 149 percent year over year.