What’s better than taking on the National Association of Realtors (NAR) and winning?
Well, launching your own flat-fee, AI-powered real estate service just months after of course.
In the wake of the new real estate commission rules, which were born from the Sitzer-Burnett class-action lawsuit, a new service called Landian has launched.
The word is a play on land and guardian and aligns with their mission to “safeguard homebuyers from the excessive fees typically charged by real estate agents.” Shots fired!
And yes, Josh Sitzer is one of the company founders, along with Bryce Galen and Neal Batra, per TechCrunch.
Why Landian?
Per their mission, they want to bring down what they refer to as “excessive fees” charged by real estate agents.
In the not-too-distant past, it wasn’t uncommon for a seller to pay 6% of the sales price, with 3% going to both listing agent and buyer’s agent.
This fee structure was the focus of the NAR lawsuit, and because of it, agents can no longer advertise compensation via the MLS. However, for many transactions it’s still business as usual, just a little different procedurally.
Going a step further, Landian wants to bring down the buyer’s agent fee instead of sellers simply baking it into the sales price.
The company aims to save home buyers a year’s worth of mortgage payments with pay-as-you-go fees.
Instead of the usual 2.5% to 3% commission a home buyer must cough up, the newly-launched proptech (still in beta) charges as little as $199 per offer. And $49 per home tour.
They argue that this could save a home buyer on a typically priced $500,000 home around $15,000, less their fees.
For example, a home buyer could pay just $643 if they took five guided home tours and made two offers. That’s $14,357 less than the typical 3% buyer agent commission.
At the moment, Landian is available in both the United States and Canada.
How Landian Works
The process is fairly straightforward.
Once you find a property you like on a website such as Zillow or Redfin, or a real estate brokerage site, simply copy and paste the URL of the listing into Landian via the “import listing” tool on their homepage.
From there, it will pull up the listing to ensure it’s the correct property, including address, listing price, square footage, number of bedrooms/bathrooms, etc.
It took a couple minutes to load for me once I pasted a sample listing from Redfin, but it did indeed work.
Once it finishes loading, you’ll see two buttons at the top of the page, including “Schedule Tour” and “Make Offer.”
If you select one, you’ll be asked to register with Landian. I went ahead and registered to see how it worked.
After I did, it took me to the tour page where I could pick a tour time and date. Of note is that you do need to pay $49 upfront for the tour and they require a credit card to do so.
They said this “shows your Landian agent you’re a real buyer.” Speaking of, you’ll be paired with an actual real estate agent for the tour.
The Landian agent you meet up with may also suggest that you sign up for the Landian Exclusive Package, which includes up to 5 tours and 2 offers for $1,799.
It’s payable at closing and if you sign up, they’ll refund the $49 tour fee. However, it puts you in a 90-day exclusive buyer representation agreement.
And it could be significantly more expensive than the à la carte services. For example, five tours and two offers only costs $643.
Of course, this might mean be paired with a new agent each time. But since the process is fairly bare-bones and streamlined, that might not matter much.
Once you tour, you can submit an offer from the Landian website as well by clicking on that “Make Offer” button. You and your agent will draft a written offer and submit it to the seller.
At the end of the day, it’s a kind of do-it-yourself model with some guidance from an agent. You can also bring in other assistance you might need along the way, such as a closing attorney.
And Landian says it “will refer you to a top-rated closing attorney” to handle your closing, including the signing of final documents. Note that those fees are NOT included in the fees charged by Landian.
Why Use Landian Instead of a Traditional Real Estate Agent?
Money. That’s pretty much the argument. As noted, a buyer’s agent can cost as much as 3% of the home purchase price.
On a $500,000 home that’d be $15,000. And while this fee used to be paid by the seller, due to the real estate commission changes, many sellers are opting to offer nothing to buyer’s agents.
As a result, buyers must now either pay this commission themselves out-of-pocket, or ask for seller concession to cover the fee.
The problem with seller concessions is they typically increase the sales price by the same amount. So the home might now need to sell for $515,000 (and appraise at that price also!).
This would mean that the home buyer would effectively pay for that representation for as long as they had the home, via a higher loan amount and/or purchase price.
Instead, they could pay as little as $199 for an offer and $49 for a tour, plus whatever settlement fees/services they required.
In fact, you could even pay just $99 for an AI-powered offer, which uses technology to draft and submit your offer.
So it really comes down to savings. You just need to make sure to look at the big picture. If your agent does a poor job negotiating, you could possibly pay more, even with the big commission thrown out.
The good agents will tell you that they can get you a good deal that absorbs their fee in the process. Whether that’s true is another story.
Granted the seller might like your offer since it won’t require anything be paid to the buyer’s agent from their own pocket.
Does This Cut Out Real Estate Agents?
At the moment, no. Landian still relies upon human real estate agents to take you on tours and make offers.
So an agent can make money by doing tours and writing offers, instead of doing these things for free upfront and possibly never getting anywhere with a client.
They can also get their buyers to sign that Exclusive Package, which gives them 90-day exclusive buyer representation for a slightly higher fee.
Landian argues that working with them will also make complying with the new rules easier, given all the moving parts and uncertainty ahead.
The bigger question is could it evolve further and shut out more agents, or simply steer some out of the industry if the lower fees aren’t worth the work.
That remains to be seen, but it’s clear change is coming to the real estate industry one way or another.
Though it wouldn’t be the first time a low-cost disruptor has attempted to enter the challenging real estate space.
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.