Ridley, the company that rose to recognition on its founder’s viral “Realtors Hate Me” social media campaign, has landed a round of venture capital led by Fifth Wall.
A Dec. 3 press release said funding will be put toward services expansion for buyers, namely pocket listing access, a next-to-sell prediction model and a dashboard to manage offers and transactions. Others participating in the round include 1984 Ventures, 1Sharpe Ventures, Moxxie Ventures, Aglae Ventures, Park Rangers Capital and other existing angel investors.
“The current real estate market was not built around consumers — and it’s costing families across the U.S. as much as $100 billion a year,” Founder and CEO Mike Chambers said in the release. “This funding round will allow us to keep building a complete, lower-cost, consumer-led experience. By expanding into the buy-side and introducing new features, we’re creating a modern marketplace where both buyers and sellers benefit from real value, instead of losing out on profit from traditional fees.”
Chambers introduced himself to the space through an Instagram-fueled reaction to his local real estate market’s insistence he sell his Colorado home for no less than the “standard commission”— five to six percent — which is the very term behind an ongoing, industry-rattling rockslide of lawsuits, rule changes, and still rollicking debate.
Chambers told Inman that any agent attempting to convince him to list using the current commission model could only do so using fear and scripted talking points. “None of them could communicate their value,” he said.
Ridley assists consumers with managing a self-sale. It offers several price-based tiers of assistance, such as basic off-market advertising, AI-based pricing strategies with comps, demand analysis and live updates, listing marketing on the top portals and local MLS if allowed, as well as extensive checklists, offer and document intake, and proactive transaction oversight.
Its top-tier Pro account provides all lower levels of service on top of ongoing support from verified partner agents in Colorado, Florida, Arizona, and Georgia. Part of the funding is dedicated to expanding this program, according to the press release.
Ridley is not a brokerage. But it could be argued that from the consumer’s perspective, the company competes with other flat-fee discount brokerages, a small but ever-present segment that has long faced criticism for not being worth the commission savings. Chambers said that criticism is fair because many in that space lack the technological prowess and focus strictly on savings, not service. Ridley’s pitch, however, is that it involves agents, deploys AI, and balances a consumer focus with agent benefits.
Before news of his funding broke, Inman asked Chambers how the company can compete with traditional agents, if its model will only add to consumer confusion about where to go for sound real estate advice, and what he expects to see change in the industry.
Inman: How is Ridley different than a discount, flat-fee brokerage?
Ridley Founder, CEO Mike Chambers
Mike Chambers: We are a software company. We are using software to guide consumers through this process. Everything from pricing, home preparation, listing creation and distribution, document guidance. Like this really is a software platform, unlike a lot of these other platforms that have historically just had full service agents behind the scenes with the light sort of UI [user interface.]
So the stigma around discount brokers and flat fee brokers is that you get what you pay for, right? You’re only going to get a certain amount of service and you may be like, ‘good luck with the outcome.’ Well, the reality is the outcome on Ridley right now, the outcomes with the 60 plus homes that we’ve sold in two months are extraordinary. And so you’re not sacrificing quality of service or outcome as a result of paying a lower fee.
And then lastly, there is a role for agents in this process, right? We from day one have given our sellers the ability to call on Ridley Pro agents for aspects of the transaction that they want help with. And a lot of our sellers are using that, right, like they are getting additional pricing guidance if they want to an expert opinion on their pricing or if they don’t understand how to navigate a negotiation scenario. They are leaning on some of our Ridley pro agents.
How do you vet your partner agents and how do they get paid? What would interest them about Ridley, given your initial introduction to the space?
When I started this thing it was largely focused around empowering consumers. And the more I learned about the transaction and the realities of what’s driving up costs here, there’s a ton of inefficiencies for agents as well, right? Agents are oftentimes spending tens of hours per transaction and never getting anything in return. They’re paying high lead fees. They’re paying extraordinary high brokerage splits. So we’re trying to offer an additional way for agents to make money and monetize their expertise and solve for some of these problems that they’re experiencing as well.
So the agents go through an application process. They will pay an application fee to become Ridley Pro agents. They also pay an annual fee of $500. That fee is deducted from their first transaction, so they only pay for it if they actually get a lead, and they are paid currently a flat fee per transaction. Depending on the package that the seller chose, they’re spending an average of three hours per transaction, sorry, two-and-a-half hours per transaction right now with our sellers.
Most of that time is upfront. It’s an initial call where they discuss the strategy with an agent. They discuss pricing, they discuss when they should list … things like that. They just have sort of an initial guidance call, and then the additional help tends to come in once they get an offer and they want someone to review it with them, or they just want to make sure that it looks good.
You advertise that your AI models allow for faster, on-demand information and advice, but a lot of brokerages offer AI assistants, too. Is that still a differentiator?
Our sellers are using our AI in a way that they would work [with] a traditional agent — in the sense that they are coming back to the platform to ask questions around pricing, or when they’re not exactly sure what the market conditions are doing.
I think the problem with the way the industry is approaching AI right now is they’re trying to retrofit it into a model that I don’t believe will exist in five to eight years. They’re trying to build AI around the agent to make the agents work more efficiently. They’re not trying to pass those savings onto consumers.
And the reality is, we all have the same data. We are all using the same underlying models. We have the MLS data in the same way they do. We also have some of our own proprietary data from transactions that are happening on-platform. Every time someone interacts with our AI, it’s getting smarter.
Recognize that a lot of consumers are really frustrated with the fees associated with this process. And so, yeah, I would say the industry is not thinking about AI in the correct way. They’re thinking about AI around how to make the work of the agent more efficient, and they’re not really thinking about AI in terms of how to actually pass those savings onto consumers.
You mention that the model is not going to be the same in a few years, can you elaborate?
I believe that we’re going to move from a world where the agent is the center of the transaction, managing all aspects of the process, to a world where the platform is the center of the transaction and consumers will be navigating the process on the platform. Agents will move into these sort of supporting roles and come in through these high stakes moments.
It’s going to be a great outcome for those agents who get really good at it and specialize. They’re going to make more money than ever. Our Pro agents will sit behind their computer sometime for five, six hours a day, offering their expertise on pricing and negotiation, and they’ll make great money.
I will tell you from firsthand conversations with all of the big players in this industry, they share this thesis.
Can a Ridley buyer see all the same properties as say, a Zillow user, their private listing restrictions aside?
Currently you have the ability to see homes that are for sale using Ridley actively on the market. We have a growing private inventory of homes that have created listings on our platform that are not actively selling but are open to selling. These are either like pre-market homes or off-market homes, folks who are open to selling in an off-market, platform-driven commission-free transaction. So sellers, you know, who are thinking about selling, they’re not entirely sure, but they don’t want to deal with the 6 percent commission. They come to Ridley, they put a listing together.
Then the third listing type we have is a model that we call Ridley Predict Score. So we’re using a bunch of different data to identify homes that are most likely to list next based on over 100 different data points, things like how long they’ve owned the home for, market conditions, mortgage history, all of these different data points. And the idea is to give buyers a first view at the homes that are most likely to come in the market in their area next. This is data that real estate agents have historically used to find leads.
You state that the 6 percent commission shouldn’t be standard and many agents will argue it isn’t, but your experience says otherwise. What did you learn from your “Realtors Hate Me” campaign?
That there are a lot of folks who are frustrated with this process and with the fees associated with it. There’s a lot of folks who are frustrated with the affordability crisis that we have right now and the industry has done a really good job of convincing, and I would even argue gaslighting, consumers into believing that this process is far more complicated than the average person can navigate.
I mean, without that campaign, I would have never started this business. And the reason I decided to start this business was because I realized that I wasn’t alone with these feelings. And it wasn’t just consumers that were frustrated with this. It’s agents. I mean, even honest agents, agents who are intellectually honest about the work involved in this process will tell me that they agree that it actually doesn’t make a lot of sense, I think, whereas agents who try to justify this to themselves.
Historically, agents have spent a lot of time with sellers coming to the house and giving advice on this and that. They spend a lot of time being with buyers to go and see homes. There’s just a lot of things that I don’t think are particularly necessary. But it’s become part of the process because it keeps the consumer attached to them.
The issues with affordability right now are through the roof. And we are unapologetically consumer first. That is our sort of, line here. We are focusing around the consumer. We also want to support agents, and agents who want to be unapologetically consumer first have a great role here at Ridley. And I think there’s a bright future for them.