RealtyPeople promises full-service representation while only charging $500 plus 1%.
Over the past year, the residential real estate industry has undergone major changes.
In late 2023, the National Association of Realtors and major brokerages were subject to legal action, resulting in implementation of new rules requiring more transparency in commissions.
According to Michael Gorman, the founder of RealtyPeople, this has created a desire among consumers for a more value-oriented service offering in residential real estate brokerage.
Mr. Gorman is a former senior executive at Long & Foster and has also conducted more than $2 billion in real estate transactions as one of the top agents in Northern Virginia. His new company, RealtyPeople, provides full-service representation for buyers and sellers at a cost of $500 plus 1% of the home’s sales price. According to Mr. Gorman, this puts more money into clients’ pockets, given that prevailing commission rates are closer to 3%.
Mr. Gorman is often asked how the company can make money when charging such low fees. He asserts that the key driver is volume. Most conventional real estate agents only complete a few real estate transactions per year, and that necessitates that they earn substantial commissions on each transaction. Mr. Gorman’s model is based on agents completing multiple transactions each month. Even when charging low commissions, he and his agents earn more than most agents at other brokerages.
Mr. Gorman doesn’t see RealtyPeople as a competitor to the area’s larger brokerages. In his view, conventional agents will attract clients based on strong personal relationships and specific neighborhood expertise. On those transactions, many clients will see value in paying 3% for representation.
But for those buyers and sellers who may consider transacting without representation, who are looking for a lower fee alternative to other brokerages, or simply wish to maximize their proceeds, RealtyPeople could be a compelling choice.
Visit www.realtypeople.com for additional information on the company’s approach and pricing.
