This post originally appeared on the Louisiana Technology Park blog.
Melanie Murr says it took her only a few months in the real estate industry to realize it was ready for major change. The commissions were steep, the technology was years behind other industries, and agents who lacked mandatory training often left clients wanting better customer service.
“Almost immediately I knew we could build something that could do better, that was more concerned with protecting and getting information to the consumer rather than maintaining the status quo for a really outdated industry model,” she says.
That dream has become a reality in 2017. Murr has teamed up with tech-industry veteran Sean Montgomery to launch Property Sprocket, a Baton Rouge-based startup looking to disrupt the real estate market by dramatically lowering the costs to list a house while increasing the level of customer service to sellers. The co-founders launched their first product this summer for the Baton Rouge market and have plans to expand.
“The real estate industry is ripe for a shakeup,” Montgomery says. “It’s kind of been the same model for the last 100 years or so.”
At the heart of Property Sprocket’s business model is the notion that while technology has drastically lowered the cost of listing a home, those savings have not been passed along to the consumer, with listing agents still taking fees of thousands of dollars with each home sale.
“We want to dramatically lower the cost of selling your home, giving people the ability to keep more of their equity instead of giving it to a real estate agent,” Montgomery says.
He says a common use case for the product would be a family that has outgrown its starter home and is looking to sell it for $200,000. Normally the commission for such a sale would be 5 to 6 percent, or $10,000 to $12,000, with half going to the buyer’s agent and half going to the listing agent.