A few years back, Philip Lang and David Walker watched as many friends and colleagues struggled with their experiences buying or renting a place to live in New York City. The story was always the same: an aggravating experience that cost too much money.
They thought finding a home should be a better, more technology-driven and transparent experience. Finding a place to live should be fun and not leave people feeling vulnerable and in the dark. As entrepreneurs, Philip and David began thinking about how to improve this experience.
Philip and David, both Yale graduates, come from the worlds of technology and investment banking. Their first order of business was to gain a deep understanding of how the traditional real estate business works and how it has framed the consumer experience. What they found was plenty of opportunity to build a new technology-driven business model.
Suitey aims to streamline the process of finding a place to live, which in New York City often means having to seek out several different brokers to view properties. They do this by offering a robust online search experience for buyers and renters and then connecting consumers to a Suitey agent who will be their point-person for viewings, negotiations and the transactions.
Suitey’s business model is currently focused only on buyers and renters in an effort to provide the ultimate consumer experience.
How it works
Suitey is based in New York City and currently serves solely the metropolitan area. Prospective buyers or renters can visit the Suitey website and sign up for an account so they can view all available listings.
Once they find places they’d like to see, Suitey connects them with one of its agents who will take them to visit properties, and perform all the traditional services like negotiating an offer and coordinating the transaction.
“We believe in letting agents do what they do best, which is taking clients out and showing them beautiful homes, and ultimately helping them close.” –David Walker, Cofounder
The difference with Suitey is that its agents are paid on salary and are offered bonuses based on customer satisfaction instead of the traditional commission-based model.
Similar to Redfin, Suitey offers consumers a portion of its commission at the end of the transaction as a cash-back incentive. The salaried agent model enables them to do this for every transaction.
The next obvious question is: how can you attract top-performing agents when you eliminate the commission?
Suitey has tried to address this with the bonus offer. But the company also handles the customer acquisition problem that most brokerages leave up to agents. Suitey agents are paid employees who have their customer leads handed to them so they can focus on negotiating deals and offering bulletproof service.
“We believe in letting agents do what they do best, which is taking clients out and showing them beautiful homes, and ultimately helping them close,” said David.
It’s also a rare situation where a real estate agent gets the benefits package that comes with being employed rather than independently contracted. Redfin employs its agents and so does a smaller Seattle-based brokerage, Findwell. (Read Findwell’s next generation brokerage story here.)
When recruiting, Suitey looks for agents with experience who share the quest for a different way of doing business.
“While a lot of tech companies have tried to totally cut out agents altogether, we raise the role of the human being as a confidant and advisor,” said Phil.
Every employee at Suitey is either a real estate agent or a software developer, which speaks to the company’s core mission of blending technology with the real world in order to remove cost and friction from the real estate experience.
About that rebate
Suitey offers a 1% cash rebate to buyers at closing.
Cash-back incentives aren’t a new concept for brokerage companies, though they are still uncommon. Redfin is the most well-known brokerage company to offer cash back.
But Suitey is pioneering new ground for rebates in the New York market, which hasn’t seen much of this.
What’s next for Suitey?
The founders recently raised a seed round of investor funding and continue to expand their team of engineers and real estate agents.
As a blended technology brokerage, they’ll continue to invest in their online search experience and offline customer service strategies.
They’ve received press interest, which has helped attract attention from consumers. It will be interesting to see how close to home the company’s value proposition hits when it comes to improving the typical real estate experience – and also when it comes to attracting high-quality agents who are used to working on commissions in a high-priced market.
Like its competitors, Suitey will also rely on referrals as a source of new business. Since the company offers a service for renters and buyers, the idea is that renters will be satisfied enough with the service to use it for their next rental or purchase one day. And of course, the team hopes their uniqueness and focus on service translates to more referrals and word-of-mouth marketing.
The founders said there are no plans to expand outside of New York at this time.
When a real estate company thinks like a tech company
Suitey founders say their strength is in their in-house development team, which allows them to move quickly to create custom new experiences. It will be interesting to watch and see how a technology-rooted company grows as a brokerage in the Big Apple.