From Fees to Freedom: Richr’s Game-Changing Wealth Strategy in Real Estate, by Jason Rubin, and Glenn Orgin

Have you ever thought about why it costs 6% to sell a home? In an industry where change is traditionally slow, to most people, it feels like being stuck at a red light, and the light has never turned green until now. A recent ruling has abruptly ushered us into a new age. At Richr, we have been at the forefront of this dramatic shift. The class action lawsuit against the National Association of Realtors isn’t just a legal battle; it’s a catalyst for monumental change, challenging the foundational commission structures of our industry and signaling a move towards greater transparency and hopefully an end to 6%.

Historically, commission fees in real estate have been a mystifying subject, often lacking transparency and simplicity. Most sellers have never understood why they need to offer a buyer agent commission; shouldn’t the buyer pay the buyer’s agent commission? This obscurity has left many potential sellers in a state of uncertainty. Today, we’re on the cusp of a change that promises greater clarity and fairness. At Richr, we’re not just spectators in this change but active participants, advocating for a more open and ethical system where trust and transparency are the new norm.

“At Richr, we see each transaction not as a conclusion but as the commencement of a lifelong partnership”. Jason Rubin, Co-founder of Richr

We understand that technology isn’t just a tool; it’s the driving force that improves efficiencies and lowers costs. As the landscape of commission structures changes, tech-driven solutions like those offered at Richr are becoming increasingly vital. Our approach at Richr goes beyond leveraging technology for efficiency; it’s about creating deeper, more meaningful connections with clients. Establishing a bond with a home seller fosters a relationship of trust that transcends the usual transactional nature of real estate.

The real estate industry has traditionally focused on the transaction as its core element. However, with the changing dynamics of commission structures, there is an increasing emphasis on customer-centric services. This isn’t merely a cosmetic change; it’s a fundamental shift in the ethos of real estate where financial and insurance services provide additional value in the sale of a home which, to most, is the most emotional transaction of one’s life. At Richr, we see each transaction not as a conclusion but as the commencement of a lifelong partnership. When a home is sold, sellers need investment and financial offerings, including life insurance, to build on the newfound wealth they have just earned from the home sale. When home buyers purchase a new home, they may need life insurance and financial investment offerings. We have found that a home sale is the perfect opportunity to empower home sellers through education and timely solutions, and we aim to change that during the most consequential transaction of their lives. Building a wealth platform that coincides with the sale or purchase of a home is what we’re championing at Richr.

“The role of real estate agents is set for a dramatic transformation. No longer will they be mere gatekeepers of listings and local market information. In the emerging landscape, we envision at Richr, agents will become advisors, consultants, and long-term wealth management partners.” Glenn Orgin, Co-founder of Richr

As we look to the future of real estate, we foresee a significant shift in how homes are priced for sale, which we predict will be towards ‘relationship-based pricing.’ This approach moves away from the conventional method of applying a fixed percentage to the sale price. Instead, it proposes a more nuanced and tailored pricing structure, one that aligns closely with the specific services each client requires.

In this emerging model, the emphasis shifts from the transactional value of the home sale to the broader scope of services and value provided through financial and insurance offerings. Home sales and purchases create a new opportunity to become an untraditional bank providing more value. It’s a fundamental change focusing on the depth and quality of the client-service provider relationship. This new approach is less about the sale price of the home and more about the ongoing value offered through a suite of comprehensive services, such as estate planning, financial consulting, or integrating insurance and banking products. 

This change in pricing strategy suggests a behavioral shift in the marketplace. Having built a relationship of trust with their service provider, home sellers are likely to recognize the value in continuing this partnership beyond the initial transaction. This dynamic moves the focus from a one-time sale to a continuous advisory relationship, where clients benefit from connecting with a trusted advisor who understands their unique needs and goals.

Under the relationship-based pricing model, the cost reflects the long-term engagement and the breadth of services provided rather than just the immediate transaction. Clients become more inclined to invest in services that deliver ongoing, tailored solutions, appreciating the long-term benefits of a relationship built on trust and personalized service.

This shift indicates a market evolving towards prioritizing enduring, trust-based professional relationships. It marks a departure from the traditional transactional mindset and embraces a more holistic approach to real estate services. The focus is increasingly on building strong, enduring connections with clients, offering them a comprehensive suite of services that align with their broader financial and personal aspirations while making it less intimidating. 

The move towards relationship-based pricing in real estate reflects a market that values long-term partnerships, consistent delivery of value, and a deep understanding of the client’s broader life context. This evolution in consumer behavior highlights a growing preference for meaningful, sustained professional relationships over transactional engagements.

Take the case of Gayle, a client who came to Richr with the goal of, not only, selling her home, but also in search of a comprehensive solution that addressed her broader financial needs. Our relationship with Gayle began with a focus on the home sale, but as we delved deeper, it was evident that she required more than just standard real estate services.

Gayle was looking for a partner to guide her through the complexities of financial planning and wealth management post-sale. Our approach went beyond the traditional transactional focus, allowing us to provide a holistic service package, which included personalized investment advice and strategic financial planning.

Throughout her journey with us, Gayle found value in the successful sale of her home and the tailored financial guidance we provided, which was instrumental in shaping her future financial strategy. Our engagement with Gayle is a prime example of the evolving landscape in real estate – where the emphasis is on long-term relationships and delivering comprehensive solutions that extend beyond the immediate transaction.

The role of real estate agents is set for a dramatic transformation. No longer will they be mere gatekeepers of listings and local market information. In the emerging landscape, we envision at Richr, agents will become advisors, consultants, and long-term wealth management partners. At Richr, we envision agents leveraging their local market expertise and our technological tools to offer unparalleled personalized service. The future will favor those agents who can adapt and add layers of value beyond the conventional buying and selling process.

This lawsuit and the resulting industry changes pave the way for greater consumer choice and empowerment. The rigid structures of the past no longer bind buyers and sellers. They now have many options, from DIY platforms to full-service agencies offering a range of à la carte services. At Richr, our mission is to arm our clients with knowledge and resources, turning what was once a daunting process into an empowering journey. The future of real estate is not just about having more choices; it’s about making better, more informed choices.

Moreover, the evolving commission structures are prompting a more holistic approach to real estate, integrating it with broader financial planning and wealth management. Real estate is not just a transaction; it’s a key element of a person’s financial portfolio. At Richr, we’re at the forefront of this integration, viewing real estate transactions as a pivotal component of a client’s overall financial journey.

The lawsuit against the National Association of Realtors is not just a challenge to the conventional ways of the real estate industry; it’s a beacon for a new era in wealth management. At Richr, we’re not just observers of this transformation; we’re active participants, pioneering changes extending far beyond the sale of properties. Our vision is to redefine the real estate landscape, where transparency, client empowerment, and holistic financial solutions become the standard.

The shift towards relationship-based pricing and customer-centric services signals a deeper evolution in the industry – one where the value of a real estate transaction is measured not just in dollars but in the lasting impact it has on the lives of our clients. We’re moving towards a future where the role of real estate professionals is more than just facilitating transactions; it’s about being integral partners in our clients’ financial journeys, opening up more opportunities for the client, and unlocking newfound value for Richr. 

As we embrace this new era, we invite you to join us at Richr and reimagine the potential of real estate. Together, we can build a future that values enduring relationships, delivers exceptional service, and fosters a community of informed, empowered clients. The lawsuit is just the beginning. The real journey starts with transforming how we think about, engage with, and ultimately deliver real estate services.