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As technology continues to make its way into every facet of real estate, there’s increased concern over data security. That’s why more and more tech applications now have transparency in mind.
Faira, a Seattle-based real estate transaction platform founded in 2015, is promoting just that, specifically regarding agent commissions and the strength of offers.
“Faira was founded with the belief that creating transparency in the real estate process will fundamentally change the way people buy and sell homes,” said Faira CEO and Founder Dr. Kamal Jain in a statement. “Faira’s online platform is the only real estate service that creates complete transparency from start to finish—now including the ability to natively negotiate the buyer’s agent commission.”
How It Works
Available in select markets in Washington, Arizona and California, Faira allows sellers to pick between three different packages:
Faira Free: This allows consumers to sell their property, listing it on the MLS; providing accessories such as signs, a keybox and flyers; and including professional photography services—all at no cost to the seller.
Faira One: Touted as the company’s most popular option, Faira One includes everything from the free package, a complimentary home inspection and a dedicated Faira agent to help guide the consumer through the transaction. This package charges sellers a 1 percent commission fee.
Faira Premium: For a 3 percent commission, sellers can obtain everything from the previous two packages, as well as upgraded photo options, a home warranty and in-home agent consultations. It’s the company’s “same as cash offer guarantee;” however, that stands out, reportedly allowing sellers to go with the highest-priced offer even if a lower cash offer is submitted, because the closing for the higher, financed deal is guaranteed by Faira.
For buyers, Faira works as an all-in-one platform, offering pre-inspections, a home valuation, mortgage services, and more, as well as up to 2 percent cash back upon closing.
Who Wins?
While Faira promotes saving the average seller about $20,000 in various fees, agents may be paying the price. With reduced seller fees comes reduced pay for agents. Individual services, such as open house hosting, showings, MLS entry, and more, are paid separately at the time of service. Because Faira offers sellers a free program and a 1 percent commission option, the company delegates these complimentary tasks to agents by asking them to do one courtesy open house or equivalent task per month—and because some of Faira’s tiers allow sellers to work without an exclusive agent, these industry professionals could be working without pay, or for very low pay, for a client they are not representing.
The pros? The brokerage assigns its paying leads to agents, which are reportedly vetted as qualified and often already have a signed contract. So for agents wary of the commission structure, they can knock some lead generation expenses off their list of concerns.
Because of a recent rule change from Northwest Multiple Listing Service (NWMLS) to combat accusations of price fixing regarding commission fees, Faira allows buyers to either accept a seller’s proposed commission or negotiate for a completely different payout.
Sellers are able to see all offers in real-time using the Faira platform. The company ranks these offers according to how it will affect the seller’s bottom line, taking into account the total price, commissions and concessions.
The real question about sustainability comes with agents’ responsibilities, and whether or not they are receiving enough paying leads to offset the a la carte services they are expected to take on for little to no pay.
Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com.
