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All industries, including real estate, strive to reach and retain customers. One of the best ways to attain this in the single-family residential segment of real estate is through personalization and efficiency. Technology continues to advance in ways that will allow businesses to connect with their target audiences more easily and conveniently while producing a better workplace environment for employees and subcontractors and hopefully, better interaction between those selling a service and those purchasing that service.

Single Family Residential (SFR) real estate commission and the use of agents will decline going forward.

In Part I of this series, “How Technology is Changing the Real Estate Industry” I highlighted how AR and VR will increase the clarity of the already dramatically improved technology resources available for real estate customers. I discussed how advances with mobile apps provide an added convenience for real estate companies and their agents, making time spent more productive and by giving consumers more access to information ahead of meeting with an agent, again saving everyone time. For example, for a few years now, customers can receive notifications about new property listings and communicate their interest easily with agents before getting together to view a unit. Now, those apps are even more powerful. Today many brokerage houses are offering new technology platforms that allow their customers much more information than ever before where that data was previously held tightly guarded by agents which increased their importance in the transaction. As a result, today, the need for an agent is even being questioned. While I still believe that agents are needed for this largely emotional and very personal customer interaction, I do believe for some subsets of single-family residential investment property, the agent’s role has been reduced dramatically through technological advancements, and this is part of the reason why I see commission rates coming down significantly moving forward.

Historically, residential real estate commission is paid by the seller, and typically that owner would pay 6 percent to sell a home. Today, for a myriad of reasons including competition among brokerages and agents, that rate has come down to the 5-6 percent range and that fee is usually offered 50 percent to whoever procures the buyer; whether the selling agent does and earns the full 5-6 percent fee on the selling price, or if another agent brings the buyer and earns 50 percent of that 5-6 percent fee. Nowadays, more options exist including “discount brokerages” who generally offer less service for a dramatically reduced rate, or others that still operate by the old methodology but now offer options on a sliding scale – as the price of the home goes up, the percentage fee to the agent listing the home decreases. There are also, “flat rate” brokerage operations who charge standard fees for home prices listed within specific ranges. A few examples of reduced fee brokerage houses and flat rate shops are: Purplebricks, Reali and Redefy.

Cloud-based brokerages and iBuyers

These are two types of single-family residential real estate brokerage operations that I am paying the most attention to.

Cloud-based brokerage companies balk at the traditional storefront model where buyers and sellers meet with their agents in a physical location and instead, these largely technology driven businesses opt to build out their companies by targeting and recruiting agents who want to work remotely and meet their clients out and about. One of the companies I like the most in this space is exp Realty.

There are also dedicated platforms to help customers compare agents before selecting one to meet. A good example here is UpNest.

In the last couple of years, the number of companies starting as iBuyers has increased along with the number of transactions they complete, as several groups have started to gain scale. A few names to follow here are, Opendoor, Offerpad, and Zillow Offers.

Ultimately, I believe there will be more consolidation in the real estate brokerage world, and that a combination of reduced commission and flat rate programs will become the norm. Individual names will continue to emerge as the leaders in specific types of transactions, like high end, investor-focused, or something as specific as “family moving,” where the brokerage company will provide much more than buying and selling advice and execution. These added services could include such bolt-on services as general contracting for supporting a home ready for sale or a new home ready to the buyer’s liking upon move-in day, as well as moving assistance, loans, and insurance.


Paul Gozzo works in Business Development for RESICAP, a single source service provider to large institutional owners of single-family residential real estate. RESICAP owns and manages ten different business lines based out of Atlanta, operating in 35 states with 950 employees and over 3,000 sub-contractors.

Title/Curative, Compliance, Preservation, Valuation, Acquisition, Construction (renovation & ground-up), Property Management, R&M, Dispositions.