Many of us have a love/hate relationship with change. Brace yourself. Among the latest disruptors attempting to flip the residential real estate industry on its head is Hyyve, a soon-to-be-launched Toronto-based platform where Realtors bid on residential listings, competing with other agents in what’s essentially a bidding war to get clients.
Yes, you read that right. Agents pay upfront for the right to list a property.
Sellers keep the cash, regardless of the outcome
What’s more, homeowners get to keep the cash the winning agent bid, even if the property doesn’t sell.
Although bidding for listings won’t be everyone’s cup of tea, “It gives you a direct line to sellers who want to go to market,” points out Toronto boutique brokerage agent Dorian Rodrigues, who recently signed up. “It’s another way to generate business…and will inspire agents to put more resources towards the listing.”
The platform, the first of its kind in Canada, is currently taking agent registrations and is expected to launch in time for the spring market. If all goes well, the plan is to expand across the country.
Not a brokerage, but a bold industry disruptor
Not to be confused with a brokerage, this is a system designed to disrupt the way sellers choose a Realtor, with an added incentive for them in the form of bid cash from the agent in advance of a sale. For agents, it’s a different twist on lead generation. The expectation is that this seller-friendly approach may appeal most to tech-savvy, cash-pinched younger sellers in their 30s and 40s, who may not have strong established connections with a Realtor.
Agents must pay a monthly subscription fee to place bids on Hyyve (reportedly a few hundred dollars per month on average).
Weighing the pros and cons
Potential pros and cons are being weighed up by industry experts. Re/Max Canada president Christopher Alexander thinks that the Hyyve platform is likely to be a complement to the industry, providing more choice for sellers. But he adds that the risk that some homeowners on the platform might “prioritize agents based solely on price” rather than on expertise could be problematic.
Patrick Armstrong, who co-founded Hyyve along with fellow entrepreneur Kirstin Thomas, agrees that’s a valid concern. But the platform is designed “to encourage sellers to consider overall value rather than just price,” he insists.
“Listings are inherently valuable and are something that should be monetized and controlled by the home seller,” Armstrong maintains.
He adds, “We don’t typically label ourselves as industry disrupters.”
Almost everyone else does though.
With Hyyve, Armstrong asserts, agents gain access to a wider client base and high conversion listings, while “sellers benefit from upfront cash, better agent competition and increased transparency.”
Transparency is what attracted registrant Leo Naiman, co-owner of a Toronto flat-fee brokerage. “Too many details are unclear in a regular deal,” in his view. “I’m all for any move towards more transparency in the industry.”
A draw for sellers and Realtors?
Here’s how the platform works. Sellers upload their property details free of charge. Then agents can submit detailed bids that give a comprehensive description of their credentials, sales plan, and the services they’ll provide—marketing, staging, perks, terms, etc.—along with the commission and bid amount they’re offering to secure the listing. (Agents can’t see each other’s bids.)
Homeowners choose the best bid for their purposes based on this information. The expectation is that sellers won’t necessarily just go for the agent offering the highest bid and lowest commission, but instead will focus on who’s most likely to move the listing. But that decision is entirely up to the homeowner. Armstrong points out though, that “agents who overbid and under-perform will quickly lose credibility.”
He’s aware that the open bidding process means Realtors “may face stiff competition, especially from well-established agents or large teams with greater resources.” But he believes the Hyyve app can also be a boon for newer agents, allowing them to “stand out by offering creative bids, detailed sales plans and additional services that differentiate them.”
Hyyve takes a cut
Once a bid is accepted and certain conditions have been met to ensure that it’s legit, Hyyve takes its full commission of 30 per cent from the winning bid amount. The rest goes to the homeowner. For instance, Armstrong explains, if an agent’s successful bid is $1,000, Hyyve—which doesn’t touch the agent’s commission—takes $300. The remaining $700 goes to the homeowner upfront.
Hyyve’s job is then done and the listing falls into the regular system.
Sellers potentially stand to make much more than this. Armstrong says that in countries where similar marketplaces exist, research shows that listings can earn up to 0.65 per cent of the expected sale price. That’s $6,500 on a million-dollar home.
On the platform’s website, it’s noted that agents in these competitive bidding situations often reduce their commission and offer additional services. That’s encouraging news for sellers, not so much for agents.
It’s true that homeowners can keep the bid cash even if the property doesn’t sell, although there are stipulations to protect the agent from seller non-compliance. Armstrong explains that if the homeowner breaches the listing agreement by such actions as failing to facilitate showings, not cooperating or trying to fire the agent without cause, “they forfeit the bid cash” and the agent is refunded.
Safeguarding against misuse
As for the potential issue of a client repeatedly listing the same home with Hyyve just to collect bid amounts, the platform does its best to prevent this by such measures as monitoring listing patterns and having clients meet strict eligibility criteria, says Armstrong.
“If a seller repeatedly lists without genuine intent to sell, they can be barred from the platform.”
Cloud-brokerage Realtor, podcaster and REM columnist, Daniel Foch believes that Hyyve is a “game changer,” giving agents a centralized place to compete while providing clients with a consumer-first approach.
He recently became a member of Hyyve’s advisory panel. His reasons?
“I want to be part of anything disruptive in real estate.”
Susan Doran is a Toronto-based freelance writer who has been contributing to REM since its very first issue.
It’s a little early for an April Fools joke.
What if your end up with an unrealistic seller, you paid money for a listing that could be impossible to sell.
Interesting concept but I can’t see myself paying $$ to a seller just to get a listing that doesn’t have to sell, to collect the fee. Too many potential issues, despite the ‘steps’ the site takes.
I’m sure some will, however.
Great. Another way for the realtor to get screwed. Sellers should be paying realtors for their preparation time to bid for a listing presentation.
All of the buzz words and phrases are used: “disruptive, innovative” but it’s still a pile of crap designed so that a “company or platform” can earn $$$ by doing nothing. There are plenty of Brokerages that do not follow the 5% mantra and offer value to the consumers. The biggest problem is the BIG brokerage names, you know them, that use mythical phrases to maintain a 5% level. Let’s hope this idiotic, new, disruptive platform dies an agonizingly slow death without doing harm to this industry. As a policy, I list at 1.25%, so I can still save that $1,000,000 seller $10,500 (or thereabouts, plus the HST) and offer the same service levels. If the consumers aren’t aware of lower-cost brokerages, it’s the industry’s fault for letting larger Brokerages control the narrative.
The Client – Realtor relationship is about TRUST. Clients should be contracting a Realtor with whom they may know, have been referred to by a trusted person in their circles, who displays knowledge and experience guiding buyers and sellers through out the transaction and is both easy to communicate with and available to communicate with… There will always be rate shoppers. There are also levels of service and experience. There will also be those that join the race to the bottom. Buyer beware.
This is a fantastic idea but as a RE and prop tech investor I think they will run into issues of legitimate listings especially if the money is given up front to the clients. Also the realtors who come on these are expected to be great but what is done to check their references etc. Reviews are not useful since some (not all) may buy these or ask their friends to give them reviews etc.
Sounds like a mess to me!
Wait until RECO gets involved when things go “messy”. ; )
Reco is good at fining agents but has a poor record of protecting agent’s rights, whatever they are. take a survey and ask Realtors if they trust RECO and the answer will tell you a lot. Perhaps an association that actually addresses Realtor’s needs is needed (no, not a union of sorts).
Who cares anymore. Every day this industry gets hit with something else to take more and more from Professionalism in this diminishing industry.
And as usual all our dues$$$ to Associations, Brokerages, Goverments and Boards that do nothing to protect the industry but are more than will to increasingly take are money every single month of every single year.
The bottom line is “selling” real estate has not changed in my 35 years in the industry. That being the actual dealing with a buyer or seller.
But all the crappppp associated with that main process gets conveluded and allows dirty agents to screw fellow agents and the public. And creating a shit full of money to those (mentioned above) who have nothing to do with the main goal of selling and buying real estate.
Its becoming … no sorry … It is one of the most unprofessional bussnesses going in my opinion.
Ummmmm, this process is Tresa compliant?
Whoa. Monetizing the system does not sound like a solution. More greed comes to play and the only real winner is the platform that collects 30% of the fees for no real effort, accountability or consequence.
This spells disaster in so many levels. Very unprofessional to say the least!!!!!
So your property is in Windsor and the winning bid is from a sales rep in Ottawa. What a great platform. This clearly illustrates why business ideas should not be developed in a Pub.
There are so many industries that will fall due to AI. We have an industry that relies on what I call the soft science of people. Somthing AI, as of yet, can not possible replace. People get in their own way, they make rash decisions, they use heated words, and they fold to soon. It is our job to put them back on course. Defend their descisions. Help them make decisions to move them forward without regret.
It amazes me with this very important job that we do, someone has figured out away of driving us into the ground.
Borrowed for Pratical Magic: you can’t practice real estate while you look down your nose at it.
Dummy up!
Sounds like a silly service to me. Bottom line home sellers are fed up paying high commissions to sell THEIR home, which they have invested so deeply into. These days, houses for the most part are selling faster than you can list them – especially in key markets. So, I’m not sure why or how this concept helps? Seems like an unnecessary layer just for a seller to make a small ‘commission’ to list. I’d rather see them help identify a ‘best’ fit in finding the right Agent in my jurisdiction. The platform/service might make more money helping to connect the right agent to the home seller by charging a fee to help showcase the best Agent for the job. The platform could charge sellers to use the platform to access curated information on Agents. And Agents could pay for the benefit of hosting their stats… sort of like Angie’s List …