Hybrid agency Nested takes aim at rivals with ‘commission war’
The hybrid agency says it hopes to sink rivals Keller Williams and eXp by putting more cash into agents’ pockets.
Nested has launched a commission war designed to sink rivals Keller Williams and eXp by putting more cash into agents’ pockets.
The supported, self-employed estate agency platform which is backed by media giant and Purplebricks shareholder Axel Springer is now offering a choice of two commission options to existing and new agents – including one that pays the agent 75% of the selling fee on completion and 100% once they exceed the cap.
COMMISSION
Currently Keller Williams pays just 63% and eXp 70% until an agent ‘caps’ and which means a Keller Williams or eXp agent must bank at least £80,000 before commission rates can improve.
Nested operates a ‘cap’ system where the agent receives 100% of the sales commission paying just a £250 transaction fee thereafter after a certain threshold of monies is banked.
A 50/50 commission split basis for agents that want more financial and admin support.
Agents are free to move from package to package and all receive phone support, technology and the possibility of a start-up loan.
HALVED
Monthly fees to operate both sales and lettings have also been halved to £125 plus VAT – cheaper than both Keller Williams and eXp.
Alice Bullard, Nested Managing Director, believes the company’s commission splits are now the best in the industry.
She says: “We will be the number one self-employed agent platform on every metric – the best platform for the best agents.
“We know we are the most supportive business in the space and this sets our agents up for success.
“We already have the best tech and want to offer the most generous commissions to cement ourselves as offering the most attractive package.”
It’s estimated that there are now over 1000 self-employed estate agents in Britain, around 2% of all estate agents.
Bullard adds: “Whilst our competitors evangelise about reading real-estate ‘Bibles’, elusive revenue share schemes, building legacies and so on, Nested are all about relevant and powerful agent support and putting money back into agents’ pockets rather than just talking about doing so.”
Nested have burnt through £40M, with pretax loses of 7.3M in 2020, and 6.3M in 2021, it will be interesting to see their 2022 balance sheet. Al that is happening here is investor capital is propping up a business model that does not produce profit, or ever will produce profit, worst still the UX for the end client is terrible.
Just as Strike found out, you can go out and buy the market all you like, but when the investors cash runs dry, operations stop. And then come the layoffs.
I have met over 750 Proptech founders 35% in the residential agency sector, worked with 62 of them, about 5% have a real value add/different model that does something useful. Day one I ask – what is it that you are doing differently – clearly Nested is just burning cash, one of several, but in 2023 VC’s appetite for funding follies, and digital marketing companies like Axel Springer may well draw a line in the sand and realise that real innovation starts with commercial ideation day one.
Fact check:
My monthly eXp fee is £125 plus VAT.
How is Nested’s £125 plus VAT cheaper than eXp?
Also, you are correct we cap at £80,000. We then ALSO receive 100% of the commission, less £250 per transaction (Nested also take £250 then also).
What this poorly written and poorly researched ‘advertorial’ does not say is the figure Nested agents cap at.
What is that figure please?
Fact check:
My monthly eXp fee is £125 plus VAT.
How is Nested’s £125 plus VAT cheaper than eXp?
Also, you are correct we cap at £80,000. We then ALSO receive 100% of the commission, less £250 per transaction (Nested also take £250 then also).
What this poorly written and poorly researched ‘advertorial’ does not say is the figure Nested agents cap at.
What is that figure please?