Referral proptech firm raises $2M to connect home sellers to top agents with commissions set by Artificial Intelligence (AI). With this new technology, home sellers can now opt for performance-based commissions.
UrbanAgents.com, a referral proptech firm that connects home sellers to a curated list of agents from various real estate agencies, has raised a $2M seed round from FarSight Capital, APAC Realty and angel investors.
With this funding, the startup hopes to use AI to set commission guide for home sellers connecting to top agents in Singapore. In general, the referral proptech firm only enroll licensed agents deemed to be within top 5% cohort based on past transaction and listing history data.
“Home sellers want one thing – sell their homes at a good price. However, in the traditional model, agents taking a fixed commission rate have little incentive to ‘go the distance’ in order to achieve a higher price for the home seller.” explains Michael Cho, CEO & Founder of UrbanZoom and UrbanAgents.
“Meanwhile, our machine learning team at UrbanZoom have built a highly accurate auto valuation called Zoom Value, which is now being used in various capacities by banks such as OCBC, DBS, as well as other startups like MoneySmart, Ohmyhome, SoReal, etc. We thought why don’t we leverage on this and tie it to agents’ commissions somehow?”
In this service, currently available for HDB and Condo home owners, the “Target Price” will be pegged to the home’s Zoom Value, which is calculated based on an AI model with inputs such as recent transactions, relevant listings and features specific to the unit as provided by the home seller.
“The idea here is that we peg the agent’s fees to his performance. If he only managed to sell at a price significantly below the target price, he’ll receive only a nominal commission of $1,888. Conversely, if he can help the client achieve a price significantly higher than the target price, he should receive higher commissions for his efforts, up to a maximum of 2.5%.” adds Michael Cho.
“Our analysis also shows that the top 5% agents in Singapore alone represent more than half of all home seller clients, at least in the HDB market. Therefore we use that as a criteria for agents who wish to join our program, and in turn, this gives end consumers assurance that they’re dealing with an experienced professional.”
This service by the referral proptech firm has been soft-launched for a few months, with a number of homes already sold. In fact, current clients have overwhelmingly picked the performance-based option over conventional fixed rate structure.
Wong Toon King, well-known internet entrepreneur and managing director of FarSight Capital, elaborates “Here’s an AI-first startup that is using machine learning to drive instant valuation, search and connect best proven agents, and set commission guide for the transaction. Ultimately, we think this data-driven approach drives transparency and better alignment of interest by changing the way agents are being paid and motivated.”
Jack Chua, CEO of APAC Realty adds “At APAC Realty, we hope to create a win-win situation – homeowners are assured of great outcomes while our agents can receive a healthy pipeline of clients to offer our professional consultancy services to. In that sense, we see a lot of synergy with what the UrbanAgents team is trying to build.”
“The performance-based commissions set by AI developed by the referral proptech firm, points to the signs of the times, and property agents must upgrade to keep up or die”, said Mr Paul Ho, chief mortgage officer of iCompareLoan.
He noted that many property agencies struggle to keep up with all the regulatory changes in the industry, as well as the changing financial calculations for acquiring a property. He urged property agents to master the basics in property financing, refinancing, taxation and CPF.
Mr Ho said that iCompareLoan.com runs a full 2 – 3 days course on how property agents can produce such reports for their customers. He added that the trademarked course teaches Property Agents how to generate complicated Financial calculations using – Home Loan Report (TM) – in 3 mins flat. This helps Property agents to close deals faster and serve customers more professionally.
The Home Loan Report tool is a Singapore’s first one-of-a-kind analysis platform that provides latest updates of detailed loan packages and helps property agents, financial advisors and mortgage brokers to analyse home loan packages for their clients and give unbiased home loan / commercial loan analysis for their property buyers and home owners.
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