Justo, a new technology-based real estate brokerage firm that recently launched in the Greater Toronto Area, says the real estate industry is at a turning point and its model “puts cash back in home buyers’ pockets and gives sellers a better fee and a target price guarantee.”
Daphne De Groot, the company’s CEO, says the brokerage offers premium services, low rates that are fair and transparent and an advanced MLS search engine for both buyers and sellers.
“We use the power of information, technology and efficiency to lower our costs and pass on the savings to our clients.” She says Justo is derived from the Latin word Justus, meaning fair and transparent, which is the foundation upon which the company is built.
It is geared to people frustrated by elite brokerage commissions and high-pressure sales tactics, she says.
“We saw the way things were being done in the real estate field and we thought that there were better ways to do it. So, we dug down to do research,” says De Groot. “We realized that with the help of the real estate agents, who have a lot of knowledge and experience, together with the technology and the data that is available today compared to say 20 years ago, the combination of both can be the ultimate way of doing the process of buying and selling a house.”
Justo’s all-inclusive service model bundles some of the extra fees associated with buying and selling a home at no additional cost including home inspections, staging and lawyers’ fees, allowing customer to have a more efficient and streamlined experience.
This is how Justo explains what it does. In most real estate transactions, the buyer’s agent is paid by the seller and not the buyer. Typically, this commission is 2.5 per cent of the purchase price, plus HST. Justo offers sellers a listing commission of 1.5 per cent with a 30-day target price guarantee. It splits this commission with the buyer, 50/50, when a minimum purchase of $300,000 is made. If it does not sell the property at the target price in 30 days, the company will reduce its fee by another 0.5 per cent to just one per cent. (1)
The average GTA home is selling for approximately $850,000. Using the Justo model, the buyer will be represented by an agent with more than a decade of local experience and get home inspection and lawyers fees included and approximately $6,250 in cashback.
Also included in Justo’s package is photography, a 3D tour and staging at no extra cost.
“Justo’s concept makes a lot of sense. Buyers and sellers are looking for something different, something that is more rewarding for them,” says Vicki Schmidt, Justo broker of record. “Technology and accessibility to data is allowing people to be more involved in the real estate process, so sharing the commission with our clients makes sense.
“The fundamental idea behind everything we do is being very fair and transparent. With that, nothing’s a secret. Our model is posted right on our website. Clients don’t have to worry about negotiating with us or being stressed out because they have enough stress to worry about. They don’t need to be worried about trying to negotiate with their real estate agent. So, we really are an ally to them.”
De Groot says the company is focusing on the GTA because it’s a huge market with an average of 100,000 transactions a year.
“With the average price about $800,000 that’s approximately $80 billion of commissions going to agents. (2) Later on, we hope to get into additional markets,” she says. “Hopefully this model is going to grow beyond the GTA but we want to first establish and focus ourselves, as real estate is a very local market. So, we want to establish ourselves in the GTA and later hopefully go across Canada – and even across the world.”
She says Justo fills a void between a discount brokerage where it costs a consumer less, but has fewer services, to traditional brokerages where a lot of money is being spent and plenty of services are being offered.
“There’s no combination of both where you pay less and you get more. That’s a big point. The other thing is the whole process is more efficient and streamlined. It’s quicker and just more convenient for a person,” says De Groot.
Update: Following publication of this article, Dapne De Groot emailed the following clarifications:
There is a bit of a mix between what we offer to our buyers and sellers. When Justo represents the buyer, the 2.5% given by the seller, we split in half with the buyer. Meaning the buyer receives cashback on the house that he buys with Justo. When Justo represents the seller, we charge only 1.25% ,which is half of the typical listing fee.
The $80B in commission should be $80B in transactions, and 5% ,the typical fee gathered by both agents, amounting to $4B.