A recent start-up based in Uptown said it intends to disrupt the residential real estate market by reducing the six percent commissions that realtors charge for buying and selling a property.
"I think they should be ashamed of how much they're charging people for this service because they know that the internet has so radically changed their job day to day,” said Alex Doubet, 29, Chief Executive Officer of Doorhomes.com
Doubet started DoorHomes.com a year and a half ago and just surpassed $100 million in sales, he said.
"You know, if we pull off what we set off to do, we'll change the fee structure in American real estate, forever,” said Jackson Upcheshaw, Lead Buyer’s Agent for DoorHomes.com.
Door Homes charges a flat fee of $5,000 to buy or sell a house regardless of its price. It still collects that three percent commission, but anything over the $5,000 fee, gets refunded to the client at closing.
Ali Azeem found the company recently in an on-line search and used Door Homes to first buy a lot and now sell his existing home in Farmer’s Branch.
"List price for this house is $439,000,” he explained. "With a traditional agent, I would be paying them $12,000 or $13,000, whereas here, I'm just paying $5,000. I'm saving $7,000 as a seller,” he said. "I just stumbled on it by chance, and it worked out pretty well.”
Among other things, Door Homes creates a 3D model of each house in which buyers can virtually walk through a property. All of the homes it sells are listed on MLS, and Doubet said his firm pays traditional agents their three percent commission to bring in business.
But why would a realtor come work for DoorHomes.com?
“That's a great question, and I get asked that a lot. My answer is I don't want them to come work for us, with one exception. No one at Door was a real estate agent before working at Door,” said Doubet.
Flat fee brokers are not new. Few take off, and most don't last. But Doubet is right that the internet has changed how people shop for real estate. Doubet just doesn't believe big commissions can survive many more cycles.