It only enrolls the top 5% of firms’ agents to its platform, who get minimum commission fees of $1,888.
UrbanAgents is a referral platform, working on connecting home sellers to real estate agents. But instead of simply connecting clients to agents, the proptech startup would only enroll the top 5% amongst these agents to their platforms, based on past transaction and listing history data.
Michael Cho, founder and CEO of UrbanAgents, noted that the top 11% agents alone handled more than 80% of HDB transactions in 2018 findings, according to data from Council for Estate Agencies (CEA).
In addition, the platform leverages on artificial intelligence to set the agents’ target price for properties. If the agent fails to reach the said price, the commission they’ll receive will go down as well. The minimum commission fee they can get is $1,888.
Michael Cho, founder of UrbanAgents, explained that this approach opposes the conventional fixed rate one, where agents could receive little incentive to "to the distance" in order to achieve a higher price for the client.
“We do this by, first, curating a select group of top agents based on data, and then pegging their commissions to actual performance (ie. final sale price) so that the agent is highly incentivised to achieve the best possible price for the home seller,” Cho said. “We qualify the incoming home seller leads and pass the legitimate leads on to the agents.”
The startup makes profit by charging marketing fees to agents, but that is only when they made money themselves.
Furthermore, he noted that their analysis showed that the top 5% agents in Singapore alone represent more than half of all home seller clients at least in the HDB market.
In July, UrbanAgents secured $2m in a seed round led by FarSight Capital. It was also attended by APAC Realty and angel investors.
The funding will be invested in hiring talents as well as in marketing initiatives.
On the other hand, TK Wong, the managing partner of FarSight Capital, believes that UrbanAgents will be “a highly sought after service”.
“Urban Agents, together with its AI-powered UrbanZoom instant property valuation engine, are driving an AI-first model to building the next generation prop-tech companies. We believe it's a very big idea, where data and AI will deliver a 10X more precise and better buying and selling experience for property owners,” Wong said.
He explained that the valuation engine is accurate to less than 2.4% median error, allowing the platform to make recommendations objectively.
“I think this idea is highly disruptive and unique in contrast to the ‘many listings’ model we see on the market today.”
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