A new Seattle real estate startup that wants to help Zillow Group CEO Spencer Rascoff sell his home just raised some investment money.
Faira has reeled in $1.4 million from Pessoa and Partners Tech 10 and will use the fresh cash to help grow its platform that promises a “new way to buy and sell real estate.”
Founded in April, Faira wants to reduce complication and increase transparency for those that are buying and selling a home. It does this by conducting inspections before a house goes to market, providing information like seller disclosures and third party appraisals upfront, and utilizing technology to create a more efficient negotiation process online.
Faira makes money by charging a 0.5 percent platform fee to homebuyers. It also helps sellers eliminate agent commission fees by providing services like an MLS listing, inspection reports, professional photos, and syndication on sites like Zillow and Redfin.
Speaking of those two Seattle-area real estate giants, Faira says it does not compete with the companies and rather calls them “partners.”
“Our biggest competitor is complexity,” said Faira CEO Kamal Jain. “Complexity makes the process more expensive for everybody involved. Faira captures the value lost in the complexity. The Faira process is so simple that buyers and sellers can transact a home for only 0.5 percent. Faira works with or without agents and Faira listings are accessible on Redfin, Zillow, as well as on other sites that source data from the multiple listing services.”
“Faira represents the most important value of a marketplace, that it should be fair for all its participants, whether buyers or sellers,” Jain said. “Fairness helps a seller to find that buyer who would be most happy with the purchase. It results in optimal revenue for the seller and the best home selection for the buyer.”
Earlier this month, Jain wrote an open letter to Rascoff, asking him to list his home on Faira. From his letter:
Your Seattle home has been on the market for 3 months now and I noticed you have already discounted the price twice and bought a Zillow promotion to help incent buyers. Like most sellers, I’m sure you want to get the highest price for your home.
At your current asking price of $1,199,000, you may be paying $72,000 in realtor’s commission plus an $8,000 credit at closing (due to the Zillow promotion) for a net price of $1,119,000.
Spencer, we have an offer for you:
Sell your home with Faira and we promise you will get $1,119,000 in your pocket or the next price cut of $50,000 is on us!
Rascoff later told HousingWire that “I would never sell my home without an agent.”
On its FAQ page for sellers, Faira notes that it is “not a real estate broker.”
“We are not negotiating on your behalf, but we provide some of the services that are usually done by a seller’s agent (like flyers, photography, etc),” the FAQ page reads. “Faira is the best of both worlds, you have most of the services of a seller’s agent but get to keep the 3 percent seller’s commission.”
On its website, Faira tells buyers that “if you choose to make an offer without an agent, you immediately get a 3 percent discount on the purchase price. No negotiation required. Of course, you can still use Faira with a buyers agent. Faira remains neutral.”
Faira employs nine and has raised $1.5 million to date.