Todd Siegel, a real estate agent who claims to have 14,000 transactions under his belt, says selling a home is a lot easier than it used to be.
“A lot of agents put your house on the MLS, and they just wait for the phone to ring,” Siegel said. “Should someone pay 6 percent for that? We don’t think so.”
Siegel has teamed up with a few tech vets to launch LevelRE, an “online full-service” brokerage that promises to save consumers thousands of dollars with the help of a proprietary platform that lets agents, buyers and sellers manage much of a property transaction from beginning to end.
The brokerage, which claims to be “leading the real estate revolution,” furnishes its agents with free marketing, leads, office space and other services, and pays them through a mix of salary and commission.
Sound familiar?
Sure, trailblazer Redfin and other tech-focused brokerages that have followed in its footsteps, like Urban Compass and Suitey, hawk similar value propositions.
But Siegel says the brokerage stands apart from those companies because it can offer more savings, caters more to sellers and offers its services a la carte. On top of that, LevelRE’s seller clients never work with LevelRE agents in person.
Glimmers of Reesio
In seeking to provide tools to sellers to automate transaction paperwork and tasks normally handled by agents, LevelRE in some ways resembles the original incarnation of Reesio, a San Francisco-based company that started out as a flat-fee real estate brokerage and morphed into a technology provider.
Reesio developed a network of just over 300 real estate agents and brokers in California who would, for a flat fee, enter sellers’ homes in the local multiple listing service, and provide photography, broker price opinions (BPOs) and open houses.
Reesio quickly dropped that business model, saying there was more interest in its platform from agents than sellers. Reesio now offers its platform to real estate agents, brokerages and multiple listing services, competing with companies like dotloop and Cartavi.
Before launching LevelRE, from 2011 to 2013 Siegel was the CEO of Level Luxury Real Estate, a flat-fee listing service specializing in luxury real estate.
The whole package?
Sellers who work with LevelRE get many of the services you receive when working with a for-sale-by-owner company or flat-fee brokerage, like marketing materials and placement in the multiple listing service.
But clients can also use a proprietary system to price a home; make, accept or negotiate offers; interface with LevelRE agents and other parties involved in a transaction; and manage paperwork.
Sellers are assigned a licensed real estate agent, but they never see that agent in person. They can communicate with an assigned agent only on the phone or through LevelRE’s platform.
If a seller’s assigned agent isn’t available, the client can also get in touch with support staff or another agent, both of whom can use LevelRE’s system to quickly get up to speed on a client’s situation.
If a buyer isn’t represented by another brokerage, a seller pays LevelRE 1 percent for these services. But if a buyer is represented by a brokerage — a much more common scenario — the seller will pay that 1 percent, plus an amount to cover a commission for a cooperating brokerage.
Sweetening the deal for buyer’s agents
Siegel says the discounted rate that LevelRE charges can give the sellers the “flexibility” to offer an above-average commission to a buyer’s agent “to encourage a faster sale.”
“We encourage them to offer extra commission to agents thereby making LevelRE commissions potentially the most attractive of all to buy-side agents,” he said. “Agents get notified via special marketing when there is a LevelRE listing with a higher commission.”
For example, a seller might normally pay a 6 percent commission to cover a 3 percent commission for a listing agent and a 3 percent commission for a buyer’s agent.
But if a seller works with LevelRE, which charges a seller only 1 percent for its basic services, the seller could offer a 3.5 percent commission to a buyer’s agent, and still only pay a cumulative commission of 4.5 percent.
The 1 percent that LevelRE charges clients selling their homes to unrepresented buyers is 0.5 percentage points less than the 1.5 percent that Redfin charges clients selling their homes to unrepresented buyers.
More differentiators
Another reason why Siegel says LevelRE is different from Redfin: LevelRe’s platform and services were originally built to serve sellers.
“There was lot of stuff out there for buyers, and we started off focusing exclusively on sellers,” he said.
One reason LevelRE can offer such a low rate to sellers is that its agents aren’t leaving their desk chairs to work with sellers.
If a client wants LevelRE to show a home, the brokerage will do it, but only for a higher price. That goes for lockboxes, marketing campaigns and other services that are part of its a la carte menu, too.
Siegel says that ability to provide some services piecemeal also sets LevelRE apart.
“Sellers will only meet an agent when they buy one of the extra services where an agent’s presence is required, such as running an open house or showing,” said LevelRE spokeswoman Susan Von Seggern.
On the buy side, LevelRE takes a bigger cut, but still can offer up to a 1 percent rebate, around what Redfin generally offers buyers. In contrast to LevelRE listing agents, the brokerage’s buyer’s agents interact with clients in person, by showing them properties, for example. Buyers are expected to find listings without the help of a LevelRE agent, though.
“A buyer’s agent is driving somebody around, helping them purchase a house,” Siegel said. “We’re trying to put the money where it belongs.”
‘Listing-search agnostic’
LevelRE’s listing search tool is “listing-search agnostic,” tapping the APIs (application programming interfaces) of several listing portals, said Steve Repetti, the company’s chief technology officer.
Levelre.com’s search page proclaims that it’s “Trulia powered,” but the site also displays graphics of ForSaleByOwner.com and realtor.com that link to listings on those sites. Levelre.com shows only one image of a property and its price.
Clicking “details” takes users away from levelre.com, delivering them to third-party listing sites where they are likely to encounter lead forms for buyer’s agents working for other firms. At a time when many brokers are keenly interested in getting more traffic from the big portals, rather than sending their own visitors packing, LevelRE’s approach to listing search might seem unorthodox to some.
Siegel said directing consumers to third-party listing sites is part of its “core strategy” to embrace existing technologies that benefit consumers.
“We’re just not going to pretend that there aren’t great tools out there already or spend millions to create one unless it adds some benefit to our clients,” he said.
That may make it more challenging for the brokerage to generate leads through its website. But Siegel said the brokerage will attract enough clients through marketing campaigns, and then “grow old school through referrals.”
“Social media has made [referrals] infinitely more scalable, and we have extensive social media integration and upcoming conventional marketing plus an inside sales force,” Siegel said.
LevelRE agents make money through a combination of salary and commission. Agents are paid a commission when they represent buyers. When representing sellers, LevelRE agents don’t earn a commission, but they receive referral fees if they bring a seller to the brokerage.
LevelRE’s “join us” Web page informs prospective agents that they can expect to provide services to clients from afar.
“As part of your base salary, you will be required to spend a portion of your time providing expert assistance via telephone or video conference to our customers,” the website says. “Those agents that provide exemplary service and assistance will be eligible for additional benefits.”
“We want real-time access for our customers whenever they want help, and that’s one of the reasons why we’re giving our agents a salary,” Siegel said.
LevelRE is a licensed brokerage in 30 states, and has brought on full-time agents in New York, California, Tennessee, Georgia and Florida, and is on a “hiring spree,” according to Von Seggern. Von Seggern said that in many markets where LevelRE doesn’t have full-time employees, the company is working with partner agents.
The California Bureau of Real Estate lists William E. Garrett as LevelRE’s designated officer, and does not list any agents as affiliated with the company. Garrett is also LevelRE’s broker of record in New York, Texas and Washington state, which show no other employees affiliated with the company. In California and Texas, Garrett is listed as broker of record for two other companies, CompassRock Real Estate and CORT Business Services Corp.
Founders and financing
The other founders of LevelRE are involved in securing financing for the startup. Co-founders Franc Nemanic, who led Hostopia to a $120 million-plus initial public offering, and Steve Repetti are also founding members of CrunchFire Ventures, one of LevelRE’s backers.
Meanwhile, Ricardo Weisz, chief financial officer of LevelRE and a former vice president of the Walt Disney Company, is a board member of the Miami Innovation Fund, LevelRE’s other investor.
“They are brilliant technology guys who have capital, so it was a perfect match,”Siegel said.
Siegel said that LevelRE has already spent millions developing the proprietary technology platform that’s the backbone of its service. Having raised $3 million to date, the company is “queuing up” for a Series A funding round in October or November, Von Seggern said.
