• Ryan Serhant's firm raised $45 million from Camber Creek and Left Lane Capital.
• Much of the money will go toward growing the firm's AI platform, S.mple.
• S.mple isn't Serhant's first app. He told BI how he turned past failures into success.

Despite Ryan Serhant's standout 2024, he hasn't escaped failure. After creating two apps that ultimately faltered, he's on to his third, raising millions to help catapult it to success.

In December, the real-estate mogul announced that his brokerage firm, Serhant, had raised $45 million in its first equity funding round from the capital firms Camber Creek and Left Lane Capital.

His firm, which he founded in 2020, also increased its year-over-year sales volume by over $1 billion, its annual letter said. In June, Serhant, who starred on Bravo's "Million Dollar Listing New York," debuted his own Netflix show, "Owning Manhattan," which was greenlighted for a second season.

Traditional brokerage firms aren't typically venture-backed. Serhant told Business Insider that much of the VC funding the firm raised would go toward growing its AI-powered app, S.mple.

As its name implies, S.mple is designed to simplify brokers' administrative work as independent contractors, allowing more time for selling real estate.

Serhant told CNBC last month that the firm's nearly 1,000 agents had been using the app, which launched last January, and that it had saved the firm more than the equivalent of 625 working days in admin time.

S.mple, available only to Serhant agents, allows agents to manage contracts, marketing materials, sales follow-ups, customer-relationship-management metrics, and more from their phones. It's designed to streamline those processes, taking over much of the administrative side of the work.

"It's Instacart for salespeople," Serhant told BI. "It's the least sexy part of what we do."

Contrary to the app's name, the road to launching it was far from simple. Two previous app ventures, Univers, a real-estate brokerage in the metaverse, and Spaces, a video-editing tool, failed to take off as Serhant hoped. But he wasn't deterred.

Serhant broke down his missteps for BI and explained how he learned from his mistakes.

Listen to what people are asking for, not what you imagine they need

In 2022, Serhant launched Univers, a headquarters for his namesake brokerage in the metaverse that allowed teams anywhere in the world to meet.

Its futuristic virtual office tower was populated with robots, agent avatars, and elevators that moved like spaceships.

It might've been eye-catching, but Serhant said agents didn't find it as useful as he had envisioned. Features like the ability to choose their avatars' hair color or wardrobe weren't helping agents close deals in the real world.

"It didn't actually solve any immediate problems for them," he said.

Serhant realized the same was true for Spaces, a video-editing app he created in 2022 to help sellers' agents design virtual tours and marketing materials.

Serhant saw the potential, but the agents did not. They were more likely to use existing apps and tools they were comfortable with.

"The biggest lesson was don't just give customers what you think they need," Serhant said. "A lot of times it's just about really asking and listening to direct feedback."

He added that the roadblocks Univers and Spaces faced helped him learn about the app-development world.

Serhant said that now he's comfortable interviewing engineers and developers and discussing how they develop models or use machine-learning technologies.

"I didn't know what to ask before," Serhant said. "I didn't know what I didn't know."

He said he persevered because he believes that making useful tech for real-estate agents is good business. He compared his app-development journey to a lawnmower that doesn't start immediately.

"You have to figure out how to get it going," Serhant said.

• A settlement earlier this year was expected to change the way Americans buy and sell homes.
• Some predicted more people would forego hiring traditional real-estate agents for their deals.
• Four people who sold or bought homes this year without a traditional broker shared how they did it.

A 2023 court ruling against the country's biggest association of real-estate agents was expected to transform how Americans buy and sell homes.

A jury found that the National Association of Realtors, or NAR, had colluded with large real-estate brokerages to keep its members' commissions high. A settlement earlier this year imposed new rules and requirements to prevent agents from unfairly siphoning more money from home sellers.

Real estate professionals have debated endlessly how the NAR settlement could affect the housing market. One prediction is that people might forego using an agent altogether; another is that homebuyers and sellers will bargain hard to pay brokers they do hire less in commissions.

The majority of Americans hire a traditional real-estate broker to facilitate their transactions. According to data from NAR itself, 86% of homebuyers in 2024 used an agent's services. A study by real-estate media company RISmedia found early indications of commissions falling, while Redfin found that commissions have remained almost unchanged since the new rules took effect in August.

Even if it's too early to see the full impact of the settlement, some insights can be gained from people who bought or sold homes without using traditional agents.

Four people told Business Insider that the NAR ruling didn't influence their decision not to hire a typical broker; rather, saving time and making the process more convenient were top priorities.

The sellers acknowledged that going to the open market represented by a classic sellers' agent could have fetched higher prices but added that they might need to pay the agent more or wait longer to close their deals.

"If I had time and I was really wanting to prioritize maximizing my profit, then I probably would utilize an agent to sell just because of the ability to get multiple offers and drive up that competition," said Chelsea Hutchison, who sold her home to a publicly traded real-estate tech company in April.

There are also other costs to transact on a home, including attorney fees.

Read on to hear from the four people who bought or sold homes this year via big companies or real-estate startups instead of a traditional agent. They break down what they paid in commission or fees, and what they felt the benefits were.

2 people sold their houses to a company that charges a lower commission

In April, Hutchison sold her house in Canby, Oregon, to property technology company Opendoor.

The publicly traded firm worth $1.5 billion that pays cash for homes and can close a deal in days, charging a 5% fee to the seller. That's a little less than the 5% to 6% sellers have paid traditional agents in the past, who then share the commission with the buyer's agent.

Hutchison said she did consider using a traditional agent and spoke with one who estimated she could sell her 2,000-square-foot, four-bedroom home for about $565,000.

She ultimately went with Opendoor, which offered her less money — $535,000 — for her home but more speed and convenience.

She was going through a divorce and relocating to a different state at the time, so flexibility was her top priority.

"It was very fast, but it could have been slower if I needed it," she said. "There was flexibility for choosing the closing date, which was really helpful to me."

She ended up paying $26,750 in service fees to Opendoor, rather than the $32,100 a typical seller's broker would have asked for to split with the buyer's broker.

Another seller, Melissa Gonzales-Szott, thought Opendoor offered a fair price for her 2,200-square-foot Las Vegas house: $448,500.

Gonzales-Szott, a 46-year-old who works in marketing, said she did her own research on the market value of her home and thought the amount was in line with what she had seen in her neighborhood.

Selling to Opendoor took 60 days, she added, compared to the six months it took the last time she sold a home.

"There were just so many factors that contributed to this being a more convenient type of process to go through," she told BI. "If there were going to be any type of losses financially for us, we were prepared — because who could put a price tag on convenience and on peace?"

Opendoor operates in more than 50 markets in 26 states.

A home seller had agents bid for his listing and picked one willing to take a lower commission

In June, real-estate agent and "Million Dollar Listing LA" star Josh Altman cofounded Redy, a marketplace where prospective home sellers post their properties and agents compete with each other for the opportunity to sell them.

Agents even give sellers a "cash bonus" after they are chosen by the seller.

According to Kenneth Bloom, who's already sold two properties with Redy, the savings are significant compared to using a traditional real-estate agent.

Bloom, 69, sold a three-bedroom rental property in Waterford, Michigan, for $245,000 and his late mother-in-law's 1,500-square-foot condo in West Bloomfield, Michigan, for $250,000.

Bloom, who said he's bought and sold at least a dozen properties in his life, said he used to look up real-estate agents in the area of the home and research their sales volumes. He would then contact the top candidates before hiring one.

He found that he preferred Redy because the agents reached out to him.

"I posted the house and a dozen Realtors responded," he told BI. "For me, it was really a time saver. It did all the research that I had to do, and they came to me versus me having to go and do it on my own."

Bloom said the commission was also lower than he had paid in the past. The agent he selected settled on a 4.5% commission, which was lower than the 6% He was used to paying as the seller.

The cash bonus the agent paid him — which Bloom said was $1,200 for the first house he sold and $1,040 for the second house — was also a large factor.

Bloom said he saved nearly $10,000 on broker commissions between the two transactions. Selling each home took less than a month, he added.

Redy, which has officially launched in markets including Atlanta, Dallas, Orlando, Phoenix, and San Diego, is continuing to expand to other parts of the country.

A California homebuyer paid a flat fee rather than a percent of the sales price

California-based real-estate investor Sergio Rodriguez used a new homebuying service to purchase a home from his neighbor.

Rodriguez, 38, and the seller wanted to keep their $600,000 transaction off-market, which means the property wouldn't be listed on the Multiple Listing Service (MLS).

The seller wanted to get as much money as possible for the home and get rid of it fast, Rodriguez said, while he wanted to save on commission costs, too.

They couldn't find an agent to help them complete the transaction because Rodriguez and his neighbor wanted to keep the commission under 4% of the total sale price, below the 6% standard.

"I even have family and friends who are Realtors, and they were like, 'Let me run it through my brokerage and see if they'll be willing to transact for you,' and they all said no," Rodriguez told BI. "It was really hard to find a Realtor to just simply transact on it. You can try to do it privately, but it's just too much paperwork."

To close the deal, Rodriguez turned to TurboHome, a homebuying service in California, Texas, and Washington. The company, which bills itself as a "real estate brokerage of the future," uses AI in addition to licensed agents. It pays its agents salaries, then has buyers pay a flat fee rather than a percent commission.

After TurboHome got involved, Rodriguez said, he and his neighbor were in contract in 24 hours.

Rodriguez said he ended up paying TurboHome about $1,000 in fees. (The company said the standard flat fee ranges from $5,000 to $10,000.)

He estimated he saved about $40,000 compared to using a traditional agent.

"That's a lot of money when you're buying a $600,000 house," he said.