New No-Fee Business Model Hopes to Empower Homeowners to Monetize Homes
“We believe that everyone is entitled to homeownership and the cost of ownership should be zero,” Says Glenn Orgin, founder and CEO of Richr, a technology and referral platform that empowers homeowners to buy and sell properties without a middleman and no fees. Miami-based Cosmopolis Real Estate recently teamed with the platform with a plan to introduce homebuyers to 1,600 new homes in South Florida that are now available to purchase.
The business model came about as a way for any homeowner to list on the MLS. “The public doesn’t have access to the MLS. We have a big vision, and it’s not just about giving access to the MLS commission-free,” says Orgin. “We want to create an automated transaction platform where we would offer financial and advertising products useful for the successful sale of a home.”
Orgin says he views Richr as a service “so our clients can activate their property to drive revenue.” By that, he means, for example, to rent out your garage as storage or rent out your dock. And, Orgin is on to something by that measure. In cities with housing shortages, little room to build, and opposition to new construction, accessory dwellings can offer an affordable alternative to buying a home. A new California-based startup called Rent the Backyard aims to have homeowners build an accessory dwelling in their backyard. The company handles the construction process for homeowners in exchange for a cut of the rent when a tenant moves in.
As for Richr, the new technology platform rolled out in March, and by July, they had about 450 transactions. “The majority of those are developer construction units presold and independent single-family homeowners, who are getting market prices and selling in about three to eight weeks,” says Orgin.
He says what separates them from the competition is that “As we roll out something exciting if you find a home using Richr, we’ll credit 100% of buyer compensation on the buyer’s HUD statement. Richr is truly commission-free.”
Which begs the question: How are they making money? According to Orgin, “We are developing strategic partnerships, much like the one with Cosmopolis. We believe there will be an uncoupling of real estate services as people get accustomed to reducing fees while using technology services to give the best services possible to clients.”
Says Orgin, “Our business model is predicated on the rise of iBuyer and discount brokerages. The iBuyer is the industry’s answer to reduce an agent’s commission. We see three different pillars: investment model, the origination fee (Perch), where we can help buyers with a down payment or owners to reduce equity. We will allow vendors to provide services during the transaction process. Our home run will be the homeownership as a service to allow clients to monetize homes through our platform.”
