Estately Quietly Proves a Business Model


The Pacific Northwest, where denizens created a religion out of worshipping coffee to overcome the gloom of the rainy months, has somehow become the mecca for technology-based innovation in the real estate industry. Everyone knows about Zillow, of course. Most folks know about Redfin. MarketLeader, and its portal, are also in the Seattle area and made noise recently within the industry.

Far fewer people know about or think about Estately. But it’s time to give them some thought, because they’re quietly proving out a business model in the ongoing portalization of real estate that’s worth considering.

The Basics of Estately

If you want the history, the team, etc., go read about them. Galen Ward, Founder and CEO, is frequently at industry events, and is a brilliant guy.

The basics of Estately for our purposes is that it is a consumer portal, enabling fairly detailed search for properties. It has no ads of any kind on the site, at least that I could see. There are no featured agents who bought a zip code, no “three-headed monster” (multiple agents appearing next to the listing), and no banner ads from Home Depot. It boasts the most comprehensive listings anywhere in markets where Estately is active. (As of this writing, it appears that Estately is in 23 states.) There are more than a few people in the industry who thinks that Estately has the best user interface in the business.

So how does it work?

The answer from Estately:

Estately is a real estate brokerage and is a member of many Multiple Listing Services across America (MLS), meaning Estately has the most comprehensive database of homes available in your area.

Okay, well, so it’s Redfin, right? Well, not precisely….

Redfin, the Seattle-based brokerage, does a few things differently. For one thing, it has its own agents. Many of them are paid a salary. Redfin takes listings, and tries to get more of them. Redfin does the whole rebate-thing, which pisses off REALTORS who hate competing on price. Redfin likes to talk about revolutionizing the industry, and was directly involved in some of the past anti-trust battles.

In contrast, Estately has no agents. Not one. Zero, zip, nada. On the site’s About Us, Estately lists a number of “Vice Presidents of Brokerage Services” along with their license numbers. For Texas, that would be Fred Hanna, a member of Houston Association of REALTORS. And as you can see here, Estately, Inc. has one agent (Fred Hanna) on its roster.

But Estately makes clear that it will help me find a home:

Will you help me buy my home?

Yes! We have partnered with many of the best agents in America (and turned away the rest), and can help match you with the perfect agent for your needs. The easiest way to begin is to find a property on the map you are interested in seeing and requesting a showing. If you just want to talk to an agent give us a call at 1-800-241-3327, let us know what you’re looking for in an agent and we’ll help you find your perfect agent.

It turns out, that Estately boasts a network of partner agents: 550 of them so far today. There are four such partner agents in one area of Houston to which I may be looking to move.

It isn’t clear exactly how Estately makes money, but I imagine it’s probably via referrals. The industry standard is 25% of the commission, so one assumes that Estately sends a lead to one of its partner agents and collects the referral fee at the end of the transaction. Agents do this all the time with each other, and Estately is a duly licensed brokerage, after all.

What really strikes me about this is how Estately successfully navigated the choppy waters of real estate politics and technology by NOT making waves. It did not and does not seek to revolutionize anything. It made no rhetorical waves as did Redfin. It puts no ads on its website, as does And of course, it doesn’t seek to create a new way of making information available to consumers as did Trulia and Zillow. It found the perfect niche within the real estate industry, common practices that everyone does and is very comfortable with, and settled in.

Have I mentioned Galen Ward is a smart guy?

Further Information from Estately

I got turned onto looking into Estately thanks to an email from them announcing expansion into six new states. And then I had a wonderful exchange with the the head blogger, Ryan Nickum. So a bit more detail.

  • Estately uses the IDX feed, rather than going through ListHub or similar syndication channels. As a broker and participant in the MLS, it has every right to do so.
  • Estately claims 20% more listings than Trulia and Zillow who rely on ListHub for its data., of course, has the NAR agreement giving it the same level of accuracy.

As for the partner agents, here’s what Estately said about them:

We look for agents who are clear leaders and top performers in their geography, with an established history of success.  Of course they must be licensed and reasonably up to date with technology — our customers Google to find out who they are, so it is not sufficient to be a great agent, you need to look be someone customers can verify online, too.  We like to see great web presence and a methodical, high-quality approach to followup with proven results.  We believe internet referral customers are different than a referral from an existing friend, so we need agents who understand that and actively change their game plan to treat these great clients appropriately.  We interview each agent several times, looking for the basics:  are they presentable in different medium, clear, competent, knowledgeable, professional, responsive, confident, articulate, and trustworthy?  Do they seek extra certifications and training?  Finally, we monitor their performance after they are accepted — at the end of the day it comes down to how well they are treating our clients.

I asked further questions about the “monitoring” of their performance. For example, Redfin makes heavy use of NetPromoter Score type of client surveys. Does Estately? The response from Ryan:

For selection we use quantitative measures as a basic filter, and then qualitative measures in the interview are scored to make a ranking.  The process is designed as a mix of basic quantitative measures overlaid with a lot of human professional judgment in a scoring framework.

After an agent has been working with us, we have periodic review milestones for each agent, and look at about a dozen qualitative and quantitative metrics, which we also merge into a score sheet used for ranking.  We don’t use NPS.

Two thoughts here.

One, as a broker-participant, Estately has access to the quantitative measures of agent performance, such as price-to-list, number of transactions in a market area, DOM, etc. I imagine that Estately must use some sort of customer feedback mechanism to establish the qualitative metrics, even if they don’t use NPS, since it is impossible to find out how the customer experience actually was without asking the said consumer.

Since one of the biggest issues for real estate portals is responsiveness to leads and conversion of those leads, this is a major advantage for Estately. I wonder how long it will be before the big portals decide they too must have this ability to rank the agents who get leads from them on quantitative and qualitative bases.

Two, wouldn’t it be nice if more of the traditional brokerages who take great exception to technology portals “using their listings” to make money would place a similar focus on quantitative and qualitative metrics of customer satisfaction?

The Future of the Portal Business Model?

The reason why I find Estately’s progress fascinating is that it may very well have built and is in the process of proving out the future of the business model for real estate portals.

In my Report on Zillow, Trulia, and (Premium Content), I went into some length about the importance of the ARPU (Average Revenue Per User) metric for Zillow and Trulia. Then in my Report on Realogy and the future of brokerage, (yep, also Premium) I looked at the threat that agent teams pose traditional brokerage. Something that clearly stands out in looking at both reports is how reliant traditional brokerage is in acquiring, routing, and converting buyer leads to its lower-tier agents. The major portals that send those leads on a subscription basis to brokers/agents are looking at ARPU in the few hundred dollars per month.

It occurs to me that on the referral model that Estately is perfecting, the ARPU could be significantly higher. A $250K sale with 3% to the buy-side is $7,500; 25% of that on referral is $1,875. That’s per transaction, not per month. That sort of ARPU would blow Trulia and Zillow out of the water, and then some.

The danger, of course, is that the brokerages — who would otherwise capture most of that 25% through its brokerage lead overrides — would revolt. But then… if agent teams take over as the center of power, would it matter very much for brokerages to revolt?

Let’s refer back to my earlier post on and its move to IDX-powered portalization. In it, I wrote:

Some have opined that a “real brokerage” offers cooperation and compensation. Um, well, I am 100% certain that would gladly give you half of the commissions if you bring a buyer to one of their listings. What’s that now? They don’t have any listings? And that’s cheating, you say?

Except that describes numerous buyer specialist brokerages in America today. They don’t have listings either, and since they specialize in buyers, they don’t plan on ever getting any listings.

Is it cheating? Well, it’s certainly against the spirit of the rules. But given that brokerages have been exploiting this IDX thing for years and years and years now, setting up referral farm operations, offering cooperation and compensation on paper, but of course simply referring the business out to working agents for a 25% cut… what’s the difference again?

And it’s finally hitting some people that there is no way to opt-out of this, because it isn’t syndication. It’s IDX. is not your average aggregator; it’s a brokerage. They’re not a portal; they’re a participant in the MLS in the usual meaning of the term.

These chickens have all come home to roost in Estately. Estately, according to Ryan Nickum, absolutely offers cooperation and compensation. But it has no listings. Not one. Because it doesn’t have any agents, except for the Managing Broker, who doesn’t appear to take any listings or do “real” business development. Those brokers exist to fulfill the legal requirement. The actual business model of Estately is the exact same as agents and brokers across this great country of ours who generate leads from IDX and then refer them out in exchange for the 25% referral fee.

At the same time, look at it from the consumer’s point of view. We don’t know exactly how Estately goes about managing its partner agents using both quantitative and qualitative metrics, but we do know that Estately is offering at least some assurance of quality. A buyer isn’t going to care about the intricacies of business models; she just wants great service. If Estately can guarantee a great customer experience, and actively manages its network of partner agents to provide just that, does the buyer care about inside-baseball-IDX-bullcrap? I don’t think so.

Perhaps the heavy-duty seller’s market we are in today in the spring of 2013 would doom Estately’s model, as more and more conversations about pocket listings and pre-MLS marketing are happening across the industry. Maybe brokerages, like NRT, who have made peace with the Trulia/Zillow type of model are too busy making money to care very much about the Estately type of model. But the seller’s market will be followed by a buyer’s market, unless we have zombie apocalypse type of economic collapse.

But what I’m thinking today is that if it’s okay for Estately to work within the system as a broker-participant using the exact systems and structures that the MLS-centered real estate industry has created, then surely it would be okay for Trulia and Zillow to do the same at some point in the future.

I could be wrong about that, as brokers might take things differently if one of the Big Three did what Estately is doing. But then again, I might not be wrong.

Fun times in the fun world of real estate!


PS: Why MarketLeader isn’t just buying Estately and merging it into is a question I just had.

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Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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4 thoughts on “Estately Quietly Proves a Business Model”

  1. I know this post is from a few years ago but it look as if though they are at least using adsense at this point and putting more focus on capturing leads. Still not quite sure how they are making money at this point but there is always the opportunity for someone to by them out.

    • This firm leaks out photos of my house (interior pictures) and refused to do anything about it. When I called, this lady just raised her voice and asked me to contact MLS. I believe many people have called and made the same complaint.

      • The firm “Leaks” out photos of the inside? How did they get them? From the MLS maybe where your listing agent posted them for the public to see?

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