This post is part of our new Future of Real Estate series which interviews the leading founders and executives who are on the front lines of the industry to get a better understanding of what problems the industry is facing, what trends are taking place, and what the future looks like.
The following is an interview we recently had with Joshua Hunt, CEO of Trelora.
1. What’s the history of Trelora? Where and how did you begin?
JH: I began my career in real estate as a traditional REALTORⓇ. In 10 years as an agent, I sold hundreds of homes and made millions in commissions. I then went on to partner in franchise ownership and lead offices with a very large national real estate brand for about five years. While in this role, my primary focus was to recruit, coach, train and retrain real estate agents. It was during this time that I noticed several major flaws in the business and frankly became very frustrated. I was a hugely successful agent, yet I could not get the agents in my offices to recreate what I had done.
I started to question the industry. I realized real estate agents were making an obscene amount of money on the backs of the consumer and not providing any level of excellence that was consistent or predictable. The inconsistency among agents working under the same brand was out of control and the percent based fee structure just didn't make sense based on everything I was seeing. Technology was making the job easier, but agents all were still earning the same commission they had been making for decades. The consumer wasn’t getting what he or she was paying for!
I started TRELORA in 2011 because I believe real estate should serve the consumer, not the agent. My mission was to deliver full-service real estate for a fraction of the cost of traditional brokerages. People sometimes call TRELORA a “discount brokerage.” We don’t like that moniker because it implies we offer discounted service – we give our clients full-service real estate for a fraction of the cost. In fact, most of the time we provide more service, better technology and far more qualified agents. We’ve developed a unique team structure that allows our agents to close hundreds of deals each year while delivering consistently excellent customer service. Our agents are experts and the best of the best in their field who consistently deliver customer satisfaction (NPS) scores that are higher than top-tier companies like Nordstrom and Amazon and more than double the real estate industry average.
2. What specific problem does Trelora solve? How do you solve it?
JH: In a traditional real estate transaction, the needs of the consumer take a back seat to the agents’ priorities. We’re solving the problem of how to make real estate work for the consumer first and the agent second.
A traditional agent expects to make 2.5-3% of a home’s sale price on either side of the transaction, introducing the element of profit motive to the equation. This can cause agents to push a client outside of their price range or to hammer through a deal that may not be in their clients’ best interests. Our flat fee structure removes personal profit from the equation, meaning our agents work for the client, not the commission.
A majority of real estate agents are also undereducated and inexperienced. The typical agent will close 5.5 deals this year. Our agents will close over 200+ this year, on average. We’re able to achieve this volume by leveraging our proprietary technology platform as well as an innovative team structure that allows for task specialization and process standardization.
Where a typical agent might see two or three septic tank issues in their careers, our agents will probably encounter several this week. TRELORA’s team structure also means the client gets access to a team of highly experienced agents versus a single independent contractor. This also allows access to an expert at any time! We’re giving consumers what they’re paying for. Traditional agents need to step into reality and explain to their clients what they are getting when they pay their agent 3% commission – which typically amounts to $15-30k and higher based on the price of the home.
3. What’s the future of real estate?
Prediction #1: Real estate commissions will drop faster than any time in history over the next three to five years. In this time, we will see the flat fee model take flight nationally. Five to ten years from now, the TRELORA model will be the leader in how homes are bought and sold
Prediction #2: Buyers will access homes for sale without a real estate agent present using mobile devices and electronic lock boxes on the doors. This will give sellers and buyers much better information and access to feedback and quick answers to questions each may have. Both parties will exchange information ensuring safety and security
Prediction # 3: One of the top five brands will begin slip in the next 5 years and head towards their demise. This will trigger other brokerages to either collapse or adopt new methods of buying and selling homes.
4. What are the top 3 technology trends you’re seeing in real estate?
Trend #1: MLS consolidation. We are currently seeing MLS consolidation taking place in the US at a pace of more than 1 per week. Just one year ago the US had 716 MLSs. Now, we are down to fewer than 650. That number will continue to shrink.
Trend #2: Better real estate photography. We are seeing the quality of real estate photography increase rapidly. Sellers and agents can use mobile devices to deliver 3D tours of homes with minimal time and effort. Advances in augmented and virtual reality will allow buyers to experience a home without ever crossing the threshold. Buyers will always want to see homes firsthand, but advances in imaging will allow buyers to narrow their consideration set digitally.
Trend #3: Increased focus on consumer-facing technology. When you look at the real estate industry, there is little in the market that truly empowers the buyer and seller. The majority of real estate tech companies focus on giving agents more access, more control or more leads. TRELORA is leading the way to create a better customer experience with end-to-end transaction technology that allows them 100% transparency in their real estate deal. We will see tech in this space accelerate; consumers will start to regain control while buying or selling their home.
5. Why is the real estate industry ripe for disruption?
JH: Despite big technological changes in real estate, the actual industry has remained relatively stagnant over the last 2 decades. Before the rise of the internet, agents had to drive to an office to shuffle through massive books of MLS listings, arrange showings over the phone, market the homes they were selling in newspapers and magazines and fax documents back and forth.
Agents today show their clients homes that the client found online, often without the agent’s help. They arrange showings using various software platforms from the comfort of their homes. They syndicate their listings all over the web with a few simple clicks. They email documents and text clients. Technology has made the real estate agent’s job much easier and less time consuming, but agents still demand antiquated commissions.
Consumers are ready to have the same access and control in their home transaction as they do everywhere else in their life. As disruptive companies gain traction in this space and give the consumer a far better experience at a fraction of the price, the consumer will start to demand the same service and savings from all agents. Traditional real estate companies must adapt or they will be left behind like the Blockbusters or Borders of the world.
My favorite quote from Jeff Bezos is “your margin is my opportunity.” Real estate has insane margins; it's time we fix this in the consumer’s favor. The real estate industry is ripe for disruption. At TRELORA, we believe consumers should pay less to buy or sell their homes. We’re designing platforms and systems to bring this change about more quickly.
The Future of Real Estate is TRELORA and our Model!
About Joshua Hunt
Joshua Hunt is the founder and CEO of TRELORA, a technology-enabled flat fee real estate brokerage. Joshua is a 20-year residential real estate veteran whose mission is to shake up the real estate industry for the better.