Commission lawsuit Sitzer launches real estate startup for a flat fee

There’s a new real estate company in town, but one of the founders is likely known to many in the real estate industry. Meet Landiana real estate startup founded by Bryan Galen, Neal Batra, and Josh Sitzer – yes, the same Sitzer who filed the now infamous Sitzer/Burnett commission lawsuit.

In an interview with TechCrunchwhich one first broke the news After Landian’s debut, Sitzer said his frustration over having to pay a 3% commission to a buyer’s agent on the sale of his Kansas City home in 2017 prompted the lawsuit.

After four years of litigation and a jury verdict that found the industry liable for conspiring to artificially inflate brokers’ commissions, NAR and the four corporate brokerage defendants all dismissed Sitzer’s lawsuit and several copycat lawsuits settled.

“I wouldn’t say I had any expectations at first, as it was a multi-year battle of ups and downs, but I felt confident enough in my position to take action,” Sitzer told TechCrunch.

Sitzer’s legal action resulted not only in financial settlements, but also in changes in business practices that took effect earlier this month. The most notable were the removal of buyer agent compensation from the MLS and mandatory buyer agent agreements.

In an effort to capitalize on the real estate industry’s new normal, Sitzer teamed up with Batra and Galen, whose startup fintech company Zero was taken over by Avant in 2021 to establish Landian.

The website, which claims it is not a brokerage, allows homebuyers to select broker services and pay for them a la carte. The company describes itself as “a platform that plans and coordinates service contracts between homebuyers and licensed real estate agents working for their own agents, as well as a software tool that allows buyers to prepare their own offers.”

“Landian operates as a technology platform that provides AI-driven services to facilitate real estate transactions. This distinction means that while we assist in the purchase or sale of real estate, we do not represent clients in the same way a broker or agent would,” the company said on its website. Frequently asked questions page. “Our services are designed to complement your transaction efforts and provide a streamlined, efficient alternative to traditional brokerage services without providing legal or financial advice.”

The site allows users to import a listing from any real estate site and then book a home tour or quote with a licensed local agent, without owing a traditional commission. Instead, Landian uses a flat fee model, giving buyers the option to pay for services or at closing.

Landian charges buyers $49 for each home tour, $199 for a listing prep session with an agent, and $99 for an AI-powered listing prep session. Additionally, if the buyer wants a higher level of service, Landian charges $1,799 for a package that includes up to five home tours and two prep sessions. Additional services, such as additional home tours, offering preparation sessions or final consultations, are still available a la carte.

If buyers choose to use this level of service, they will pay the total amount due for the services used at closing. Buyers will owe that amount if they purchase a home in the US or Canada within 90 days of signing up, or if they purchase a home within a year where they used Landian to schedule a tour or make an offer. If a buyer doesn’t successfully close on a property, Landian says he doesn’t owe the company or his agent anything.

If buyers use only a listing preparation session and the seller rejects the offer, the flat rate for the listing preparation session still applies, but counter offer handling support is included as part of the original flat rate.

The company claims it saves consumers an average of $15,000 per transaction.

Agents who sign up for the Landian platform are still brokered by their brokerage and not by Landian. To comply with the terms of the NAR settlement, agents who work with clients on the Landian platform must sign a Landian Buyer-Broker Agreement, which the company says is “e-signed by the buyer prior to any services, such as property tours or offer preparation, are provided. The agreement ensures that the compensation for your services is clearly defined and objectively determinable, consistent with the latest changes to the NAR settlement.”

“By using the Landian platform, both you and your customer are protected by a legally sound, transparent agreement that aligns with industry regulations and best practices,” according to the company’s FAQ page.

Agents meeting with a customer through the Landian platform must maintain all communications with that customer within the platform.

Landian is currently available to customers in all districts, states, territories and provinces of the US and Canada. The company has not yet raised external capital and has so far worked with money from friends and family. According to TechCrunch, the company is in the process of raising a seed funding round.

Landian did not return a request for comment.