Before the internet was a thing, real estate agents had access to a wealth of information to which consumers weren’t privy. They knew the players, they knew the game – and most importantly, they knew the market. And that knowledge came at a price, an average commission price of five per cent, which consumers have been charged for decades. The system in place for buying and selling a home is confusing – so hiring someone who knows how these things work just makes sense, right?
Maybe it did in a while not so long ago. But the world has changed, and Unreserved is here to help real estate change with it.
Since launching in Ottawa in July of 2021, Unreserved has sold just shy of 200 homes, with complete transparency. That means that anyone and everyone involved, with access to an internet connection, could see the inspection reports, market comparables, and every other offer in real-time. Consumers have been begging for an end to blind bidding, and operating as an online auction house let’s Unreserved do just that.
Transparency helps empower buyers. With Unreserved’s online auction platform, they have all the transparency they need to make an informed decision – right at their fingertips. This wealth of ungated information has led to an influx of buyers choosing to buy directly through Unreserved’s online platform – without the help of an agent.
But, it gets better. Have you ever wondered how real estate agents make their commission? For argument’s sake, sellers pay five per cent when selling their home – a commission that gets split two ways between both the buying and selling agent. That’s 2.5 per cent apiece. This posed an interesting question for Unreserved. With so many buyers confidently choosing to buy unrepresented directly through the platform, wouldn’t it make sense to offer a similar commission fee to the actual home buyers themselves?
As it stands, Unreserved offers a two per cent commission to cooperating agents. So is it really crazy to take that two per cent and give it directly to buyers who do all the legwork themselves? It’s long been debated whether or not buyers shoulder the burden of their own agent’s commission fee (even though it’s clearly stated in their buyer’s agreement). Many agents will argue that it’s exclusively the seller paying those fees, making the service for buyers completely free. Whichever side of the argument you fall on, buyers can now see the true value of working with Unreserved when they receive their check for two per cent cash back on the purchase price of their new home. Buyers can decide for themselves whether the expense of an agent is worth forgoing two per cent cash back—or, say, $15,000 on the average home in Ottawa.
Many buyers will continue to work with an agent, and that’s completely understandable. In fact, they encourage it. “For some buyers, operating with the help of an agent provides the peace of mind they need to close,” says CEO Ryan O’Connor.
But, at the end of the day, “It’s the buyer’s money,” he explains. “Up until now, the only option was to give it to a real estate agent. Our research shows that this is something a majority of Canadians would like to see.”
That two per cent adds up fast. We’re not talking about a few dollars here. We’re talking about millions of dollars being paid out annually to buyers and agents. For a property bought for $1,000,000, that’s $20,000 coming right back to you. Unreserved brings a brand new choice to the industry and provides users with real control over their money. As interest rates continue to rise, this could be the push that many buyers need to enter the market.
“We’ve given a tremendous amount of confidence to the home buyer,” adds O’Connor. “The home inspections, the offers, the comparables… when we make all the data transparent and available beforehand, buyers start engaging directly.”
Targeting 50 to 60 sales a month, Unreserved sold 12 homes last week, providing home sellers are excited and flocking to the new, transparent system. All this increased confidence has the whole industry taking notice, including OREB, which is currently lobbying to restrict auction-style home purchasing.
“I take it as a compliment,” says O’Connor. “It means we’re doing something right if we’re making this much noise in an industry that seems to be frozen in time.”
And he’s right. Because giving consumers what they want? That’s just good business.