Web-Based Real Estate Firm Shares Commission With Buyers
Thursday, October 12, 2006
Three real estate agents who met while attending George Mason University launched I-Agent.com , a Web site that lets home seekers search a database of homes and new communities on the market -- and offers buyers a way to save money.
Under their model, when buyers use the site to find a house that suits their needs, an agent works with the client to finalize contracts, work out financing and coordinate settlement costs -- just like a traditional real estate transaction. I-Agent has a twist: Agents who bring buyers to the table typically collect a 3 percent commission; I-Agent is giving two-thirds of its take to the buyers.
"Home buyers are doing most of the work, so they should get some of that money back," said Khalil El-Ghoul, I-Agent's 23-year-old chief executive. "We give them all the tools they need online so they don't have to worry about missing that perfect house just because their real estate agent doesn't show it to them."
I-Agent is trying to make a go of it in an increasingly crowded field of online real estate upstarts, few of whom have been able to seriously challenge the traditional sales model.
I-Agent's executives are optimistic. Clients can search the housing database and then work with one of the company's seven agents to complete the transaction. The online search tool keeps overhead low, so they can afford to give part of their 3 percent commission to the customer. I-Agent has entered partnerships with banks and title companies to provide even more discounts. I-Agent co-founder Carlos Reyes, 25, has even formed his own real estate brokerage company to work with the company.
According to the National Association of Realtors , 95 percent of home buyers begin their search online and 64 percent find their homes before hiring an agent.
I-Agent caters to Web-savvy consumers ages 25 to 45, said company President Zeeshan Kaba, 22.
El-Ghoul and Kaba both got real estate licenses as sophomores at George Mason when they saw the rapid rise of property values. The softening market is helping their business, they said, because buyers are widening their searches.
"Now they can purchase a home and prepay their mortgage for three to five months with the money they saved," El-Ghoul said.
I-Agent, launched in August, has 200 clients and 3,000 people who search the site every week, the owners said. They're focusing on the Washington area, but El-Ghoul said he's forming relationships with agents nationwide. He's gotten inquiries from buyers as far away as Nebraska and Oklahoma.
Another local company, K-Bar , allows home buyers to check property values by logging onto its Web site. By comparing recent sales prices of similar homes in the same subdivision, K-Bar says it is able to come up with a precise value for a home that helps potential buyers check for inflated prices, inconsistencies within a neighborhood or appraisal fraud.
Until recently, K-Bar has been marketing the price-finding application to real estate agents and mortgage brokers. Now a scaled-down version of the product is available at http:/