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GoldenKey Raises $1.75 million

GoldenKey recently raised $1.75 million (TechCrunch). What’s the model?

Instead of a commission, you pay an agent a flat fee for the services you need and get a 3 percent rebate when you buy or sell a home with the help of one of the company’s partner agents (though some states like Oregon don’t allow for this rebate). That may not sound like a crazy idea, but in the rather conservative real estate world, that’s akin to a revolution.

Here’s a video pitch:

The no commission real estate network. I wrote about the commissions topic in depth a couple years ago, and I’m not sure anything has changed since.

Many consumers would love to pay for only what they need, but the two core related questions are:

  1. How do you reach consumers and win their trust? People use their friends (who are agents), because they already trust those people. Trust takes years and years to build (ask Redfin).
  2. Do the incentives line up for those doing the work? Ie do they make enough money to make it worth their while?

Yes, a large percentage of the 2 million licensed agents are not making much money. That said, many aren’t very good at their jobs. Why do they deserve to make more money? More importantly, how do we know they are qualified to do high quality work?

It seems the rise of teams is tapping into this same dynamic, while preserving the commission model. Having been a business owner for several years now — I can unequivocally say running your own business (of any kind) is not for everyone. I believe more agents should join teams to make better use of their talents, and add peace of mind to their lives. Yes, that limits their potential income — but it also limits risk and stress.

Don’t get me wrong, I believe there is a market for GoldenKey. I just don’t think it’s massive.

Comments welcome…

About Drew Meyers

Founder of Geek Estate Blog / Geek Estate Labs. Zillow Alum. Travel addict & co-founder of Horizon. Social entrepreneurship & microfinance advocate. Fan of Red Hot Chili Peppers and Kiva.

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