Josh Sitzer and his spouse put their Kansas City house up for sale in 2017, but they were unhappy about the industry’s mandate that the buyer’s agent receive a 3% charge. “Due to the anti-competitive structure of the industry, I was effectively coerced into paying for services I didn’t want,” Sitzer said. A class-action lawsuit was launched in 2019 as a result of his discussion of his dissatisfaction with his neighbor, a lawyer (Moehrl et al. v. National Association of Realtors, et al.). This year, the case led to a historic settlement that fundamentally altered the way that properties are marketed.
The National Association of Realtors (NAR) agreed to pay $418 million in damages and abolish the “Participation Rule,” which forced sellers to offer compensation to buyer brokers. This shift is expected to transform the real estate market.
Seeing an opportunity in the post-lawsuit landscape, Sitzer co-founded a startup, Landian, alongside Bryce Galen and Neal Batra. Landian is designed to replace traditional real estate commissions with flat fees. Instead of paying a buyer’s agent up to 3%, homebuyers can use Landian’s platform to schedule home tours or prepare offers with licensed local agents for a fraction of the cost. For instance, users can pay $49 per tour and $199 for offer preparation, or opt for a flat fee of $1,799, which includes multiple tours and offer prep sessions. This fee is only due upon closing, and if the buyer doesn’t purchase a home through Landian, there is no charge.
Galen, a fintech entrepreneur, explained, “Landian protects buyers from paying exorbitant commissions that eat into their closing costs.” The founders believe that while traditional real estate tech companies like Zillow and Redfin have no incentive to change, Landian represents a new wave of startups transforming the industry with its flat-fee model. Currently, Landian is operating in beta and raising funds to expand its offering.