Top 5 Disruptive Real Estate Models

Top 5 Disruptive Real Estate Models

What’s the Next Big Thing to Disrupt the Real Estate Industry?

It’s a fascinating time to be a Realtor as almost every week I come across a new disruptive real estate model that wants to fundamentally change the way we run our real estate business.

I love tracking them, subscribing to their newsletters and following their progress as they try to carve out their slice of the trillion dollar annual real estate pie. The fun part comes when you take some of their best ideas and adapt them to help grow your business.

Most new models are technology based although some simply come up with an innovative way to divvy up the commission on each real estate transaction.


Z Group LogoZillow – Right off the bat I’m going to give Zillow my number one vote.

They’re top of my list because you need to follow everything that Zillow does concerning improving the customer experience and creating a transactional real estate platform.

As an example take a look at the recent release of the Zillow Premier Agent App. The app is free for anyone with a free Zillow agent profile and is designed to make it easy to manage leads and connect with prospects. But the really cool part is that Zillow will also share user browsing behavior with you so as to make it easy to connect with the prospect and gain keen insight into their real estate needs.

That’s powerful stuff as it should help the user’s experience, help you close more deals and help Zillow sell more ads.

Now here’s the disruptor part!

Zillow has completely eaten your lunch when it comes to capturing online real estate search traffic. Despite barbs about bad data etc. Zillow dominates online traffic because they cater to the needs of home buyers and sellers.

They completely changed how users go about searching for homes. Instead of calling a Realtor and laboring through the appointment process, a user can go online and get an instant home value estimate and easily search for homes for sale.

And Zillow has also systematically acquired all the pieces it needs to create an end-to-end real estate transactional platform – from lead generation to lead management to transaction management.

How disruptive would that be to your real estate business if they decided to get out of the ad business and into the real estate business?

So how can you leverage Zillow?

I’m a big fan of Zillow and wrote an underground guide on how to use Zillow to generate free and paid leads.


Redfin LogoRedfin – Redfin is disrupting the real estate industry through a mixture of technology, reduced commission rates and agent compensation model.

At the core of the Redfin model is the absolute focus on customer experience. Redfin is a real estate broker and offers access to data straight from the MLS. The website acts just like Zillow as a user friendly real estate search site. And like Zillow, Redfin has just released it’s own automated real estate valuation tool which we might as well just call the Restimate instead of the Zestimate.

But instead of selling ads, Redfin sells real estate.

The really disruptive part is that Redfin only charges on average 1.5% to sell a home, generates leads for their agents and pays agent bonuses based on client reviews.

That’s right – your client decides how much money you make based on how happy he or she was with your performance.

The Twittersphere and forum comments are always abuzz with conspiracy theories about whether or not Zillow and Trulia are secretly building a trojan horse into the real estate transaction business. Well Redfin just huffed and puffed and blew down the front door by offering a comparable user experience to Zillow and an undisguised reduced commission model.

Needless to say, I’m also a big fan of Redfin.

So how can you leverage Redfin?

Redfin offers a partner referral program in many areas and will send you referrals. Or you join Redfin and take advantage of their lead and prospecting programs where they do most of your lead generation.


Open Door Logo OpenDoor – Opendoor has an indirect way to get listings. Instead of listing a home they buy the home, then resell it, making a profit between the purchase and resale price.

This isn’t a completely new or even an innovative model. Home flippers a.k.a. investors have been using this model forever but the big difference is that Opendoor has a big ol’ pool of cash to buy homes on the spot.

That’s a pretty disruptive business model if you’re competing with Opendoor to get a listing.

Now honestly, I was ready to dismiss this model as a gimmick when it first came out. That’s because I’ve seen all the smoke and mirrors around “we buy homes fast”, “we’ll sell your home guaranteed” and “we pay cash” schemes. The common theme is that the buyer usually requires the seller to take such a big haircut to value that only the most desperate sellers use this model.

But I think Opendoor has a chance to be really different and create a sustainable business by offering competitive pricing on homes.

You see, if you have a well run business and access to affordable funds, you can run a volume based model whereby you net 1 – 2% on the sale of every home. Revenue is generated from the sale of the home, not from commission, but it’s the same pool of money that is used to pay a Realtor.

So how can you leverage Opendoor?

Sell them homes. If their model catches on they’ll become one of the biggest home buyers in your area. Then help them resell their homes. I’m willing to bet the house that Opendoor will consider a deal whereby you find the house and the end buyer (usually an investor or someone who needs a little more time or lacks a little credibility) and you structure a deal whereby Opendoor buys the home for cash and immediately flips it to your buyer for a small mark up. The seller gets an instant sale, Opendoor gets a margin and your buyer gets a new home.


Solopro LogoSoloPro – I added SoloPro to this list because what they’re doing different is offering an a la carte menu of services.

SoloPro’s premise is that the buyer gets a 3% commission rebate, less SoloPro’s fees, at closing.

SoloPro’s fees are determined on demand by the buyer who orders from a menu of services. Do you need help finding a home, viewing homes, writing a contract, negotiating a price etc? It looks like fees can run to around $1,000 so that represents a huge savings on a $300,000 purchase.

So how can you leverage SoloPro?

SoloPro runs an agent referral program where they refer the work order to a local partner agent. Basically you get paid for performing specific services. How hard is that? And how often will the referral turn into a full listing?


exp-large-wh eXp Realty – eXp Realty makes my top five list because it’s a combination of a Cloud brokerage, it’s Agent Owned and it has a recruitment based revenue share plan.

eXp’s central premise is that it moved everything to Cloud so as to strip out the costly office overhead. Instead of spending money on office overhead they redistribute those savings back to agents through their agent revenue share program.

To keep things simple think of eXp as a broker with a similar model to KW but with no market centers and where agents receive revenue share on deals by recruited agents (not profit share) at the closing table.

Now full disclosure here. I moved my real estate license to eXp Realty. I spent a year at Re/Max, a year at KW and eight years in my own brokerage.

I loved all three models.

But I moved my license to eXp because I never went to the office anyway (so the Cloud didn’t scare me) and I was very disappointed with KW’s profit share (there’s nothing to share if there’s no profit).

I far prefer the idea of sharing gross commission at the closing table.

Now before I get lost in a recruitment pitch, I added eXp to the list because the shift to the Cloud is an inevitable evolution to the real estate industry. We’re a mobile business, we’re always out in the field and it’s just as easy to deliver a file from my iPhone or iPad or laptop and send it to the processing center in Washington State as it is to walk it into the office.

And a true revenue share program with agent ownership incentives allows any agent to build a national real estate business without the associated financial or regulatory risk.

That’s a powerful combination.

So how can you leverage eXp Realty?

To leverage eXp Realty you need to move your license to eXp Realty.

eXp gives its agents an advanced digital marketing platform, seamless integration into their transaction center and cuts the cord to the local office. You can join eXp and cut your own operating costs, build a national real estate business by referring to and recruiting other agents and receive shares in the Company whenever you close a deal.

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