HGN: Women-led real estate startup injects tech into dated sector
Technology in the residential real estate sector hasn’t changed much since the mid-century. Mailing flyers, knocking on doors and putting signs in front yards are the dominant ways of selling or buying a house.
Jessica Buffington, a former Memphis real estate agent, wants to change that outdated system.
She’s the founder of Front Door, a licensed real estate company and online platform for connecting home sellers with agents. A person looking to sell their home will upload photos and a description of their home to the website. They are then connected with a qualified agent who puts the house on the market in all the traditional, in-person ways.
The catch is that the seller takes a flat $2,500 fee rather than a typical six percent commission fee. On average, that model saves home sellers $9,000. For agents, the service provides a constant funnel of leads and an opportunity to gain exposure and relationships with clients.
Buffington’s online platform boasts over 100 agents in the platform and an overall savings of $1 million in commission fees. In August, Front Door broke even on Buffington’s initial investment and she brought on a part-time administrative associate and a full-time digital marketing specialist and a full-time developer to prepare for a more aggressive round of outside funding.
She participated in Start Co.’s 2015 Upstart accelerator. Through the start-up boot camp, she grew her business model from a local audience to something that could capture national attention. She still works side-by-side with Start Co. and rents shared office space on their incubator floor designated for companies that have graduated from accelerator programs.
Her target audience for a Front Door customer is someone who is “open-minded.” In general, that could mean younger agents who are open to technology and looking for a free and low-risk way of getting their foot in the door. Home sellers using the platform range from 35 to 55 years of age.
Ashley Pickens, a Realtor with Realty One, said that the Front Door platform makes sense in Memphis’ current real estate market. A licensed agent since 2006, she’s used Front Door to sell four homes in Memphis.
“It’s definitely a sellers’ market because our inventory is low,” she said. “In recovering from the downturn in 2008, a lot of people are underwater and are breaking even in their sale. When you calculate commission for an agent with closing costs and repairs, it helps that you don’t have to pay an extra $3,000 or $4,000 to your agent.”
Currently, Buffington is growing her company through targeted marketing and word-of-mouth. A recent partnership with ServiceMaster could boost awareness of Front Door.
Under development is the next phase of the platform, which will include a step-by-step guide to getting a house sale-ready. If an individual’s home requires home repairs, Front Door will suggest services by one of ServiceMaster’s companies.
“It’s a win-win even though some agents will not think highly of it because it’s a flat rate commission,” Pickens said. “It helps in this market right now because agents are fighting for inventory right now. The advantage we have is that we do cut our fees when other people won’t, so that makes us definitely more competitive against other agents.”