Shay’s Value Proposition in an Evolving Real Estate Landscape

Shay’s Value Proposition

This past Saturday, we launched Shay–a platform to support unrepresented homebuyers buy a home without a real estate agent. Many real estate tech companies have previously sought to develop better consumer technology tools for homebuyers, yet most have failed to deliver on their promise. Shay will buck this trend for two primary reasons: the structural changes related to agent compensation allow us to offer a compelling value proposition and the advancement of AI models enable us to truly empower buyers. 

CHANGING COMPENSATION STRUCTURES 

We launched on Saturday, a day that also coincided with the implementation of the landmark National Association of Realtors (NAR) settlement that has changed the structure of compensation for real estate agents. 

Previously, homebuyers relied on sellers to pay a commission that would be split between the seller’s agent and the buyer’s agent (typically around 6%, split 3% each way). Homesellers were effectively forced to offer commission to the buyer’s agent because they were required to post the shared commission in the listing on the MLS (the industry's internal database of listings). Refusing to pay the commission and entering 0% in the listing would surely dissuade buyer’s agents from showing their clients the seller’s home. As a result, buyer’s agents would often market their services as “free” for the buyer. 

All that changed last Saturday. The NAR settlement mandates two key business practice changes for the industry. First, seller’s agents are barred from advertising cooperative compensation in their listings. We are already seeing many sellers refusing to cover this now that they no longer risk steering prospective buyers away. This trend will only continue.

Second, as part of the settlement, buyers must come to terms with their agent on how much they will pay them before they tour properties and irrespective of whether or not the seller will pay the buyer’s agent. If a buyer signs an agreement with their agent stating they will pay a 3% commission, they better be ready to cut a check for that amount when they close on their house without the guarantee that the seller will chip in. For the average house in the US, that’s roughly $15K in cash. 

What does this mean? We are going to see a wave of buyers who either can’t afford their agent’s fees or deem the prices their agents charge aren’t worth it. These buyers will elect to go it alone and represent themselves. Shay will be a resource to help these buyers navigate the complexity of the transaction. 

ADVANCEMENT OF AI MODELS 

Simultaneously, we've seen the advancement of AI models that enable homebuyers to complete even the most difficult tasks in a real estate transaction. We’re seeing knowledge industries throughout the economy be reinvented by AI and real estate will be no different. Large language models are in a prime position to support homebuyers with the more complicated tasks most buyers have no experience with–like offer generation, offer review, and local diligence. These models will only get better and be able to take on more work at a lower cost. 

THE SHAY DIFFERENCE 

With homebuyers now having a clear incentive to represent themselves, Shay will be the resource that enables them to do so. We customize the Shay experience to meet the unique needs of each of our buyers, creating personalized task lists that walk buyers through every step of the journey. Throughout the journey, we educate buyers and empower them with tools that help them replicate even the trickiest of tasks. Access to the platform is free and we charge just $500 for some of our premium features–a steal compared to the $15K alternative. 

We’re excited to continue to get this in the hands of our users and truly empower the self-represented buyer. 

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Peter Jeffrey

Founder & CEO, Shay