Since 2018, over $10 billion of venture capital money has been invested in real estate. The amount of venture capital (VC) money being invested today is over 150 times the amount invested less than 10 years ago.
One facet of real estate that has not been changed by technology is referral only brokerages.
Referral only companies were created by large real estate franchises to avoid REALTOR dues. Referral companies are a place for non-practicing real estate agents to “park” their license for a lower cost. While a real estate agent is at a referral only brokerage, the agent does not represent clients. Instead, they earn a commission by referring clients to practicing agents.
As of 2019, OpenDoor has raised over $600 million to create a “radically simple way to buy and sell your home”. RedFin is now a publicly traded company aiming to make the residential real estate process more consumer friendly through tech. Yet, referral only companies still use PDFs and a manual process to send referrals, negotiate referral fees, and process commissions.
A new tech startup out of Arizona aims to change this. Roosted is founded by local entrepreneurs with backgrounds in real estate sales, brokerages, mortgage, title, and technology. Their proprietary development stack allows real estate agents to quickly send real estate referrals in any state for a 35% referral fee.
“There is a need that isn’t being served within the real estate community,” says Dane Briggs, Founder and Arizona Broker of Roosted. “I knew we could use our backgrounds in technology to make it easy to earn a passive income with a real estate license.”
Launched in May 2019, the first tech-enabled real estate referral company has already become one of the top 250 largest brokerages in Arizona. The next state on Roosted’s radar? California.
“There has been a huge amount of interest from California, and we’ve partnered with a reputable broker to assist us with our launch there,” the founding team noted while planning the October 2019 launch of Roosted CA.
While there is interest from investors, Roosted’s founders are committed to remaining a bootstrapped company for as long as possible. “When you take money from investors, the business becomes more about hitting metrics and growth, which has its time and place,” says Dan Might, Founder and CTO of Roosted. “For now, we’re able to remain focused on our most important goal: building great technology for our agents and partners.”