Mortgage Reali Review: Buy and Sell a Home with a...

Reali Review: Buy and Sell a Home with a Flat Fee

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There’s yet another real estate and mortgage startup shaking things up called Reali, which like others in the space, is attempting to eliminate costly real estate commissions and lender fees.

The San Mateo, CA-based company, which is pronounced “really,” charges flat fees to buy or sell a home, as opposed to taking a percentage of the sales price, like 2.5%, as is the norm.

At the moment, it is available to home buyers and sellers throughout California. It’s unclear if/when they will expand to additional states.

The company also operates a mortgage lender division called Reali Loans, Inc., which was formerly known as Lenda.

Let’s learn more about Reali and see how it could save you some money.

Today's Rates

How Selling a Home Works with Reali

Reali seller fees

First, you download the Reali app and claim your home to schedule a free home valuation with a licensed Reali agent. They’ll let you know what your home is worth in as little as a day.

Next, you can request a listing presentation where you meet your Reali agent – if you want to move forward, you get a customized home-prep checklist to get your home listed on the market an average of two weeks faster.

Speaking of agents, they assign you a local real estate agent based on the zip code where the property is located. To that end, the agent is expected to be very knowledgeable about the area.

Like traditional agents, they’ll market the property on the usual channels such as the MLS, Trulia, Zillow, along with digital channels like Google, YouTube, Facebook, Instagram, and the Reali app.

Once the property is listed, you receive real-time updates, such as buyer activity and offers, directly in the app, and you can chat with the Reali team.

You’re able to follow the home sales process from start to finish, including the escrow portion, so you’ll be in the know the entire time.

What really makes Reali different (sorry) is the flat fee model, which counters the traditional percentage-based real estate commission model.

Instead of charging 2.5% to 3% to list your home, Reali charges a flat fee. It varies based on the property’s listing price, as seen in the table above.

For example, if you home is listed for $700,000, you’ll pay Reali a $5,000 flat fee. If that sounds expensive, imagine paying $17,500 instead.

Note that the flat fee is based on the listing price of the home, as opposed to the home’s final sale price.

While you can save a ton on the listing agent portion of the commission, the buyer’s agent will likely demand their 2.5% or 3%. So you’ll still need to pay that out of your sales proceeds.

All in all, you can save a ton of money using Reali, assuming the home sells for a similar price as it would via a traditional real estate agent.

In our example, $12,500 in savings on the listing agent side of things. Not too shabby.

But that’s the kicker – will the home sell for the same amount with Reali versus a traditional real estate agent? The answer is it probably depends. Still, those savings look pretty good.

Buying a Home with Reali

Reali buyer fees

Reali doesn’t just help existing homeowners unload their properties. It also lets you get into a new home.

In fact, you can sell your home via the Reali app and then fire it up to buy your next house.

Like the sell-side of things, they rebate you a portion of the usual commission if you use a Reali agent for the home purchase.

As seen in the table above, they charge a flat fee for different sales prices. On a $1 million home, Reali would earn $15,000 and you’d be rebated $10,000.

In a typical transaction, a real estate agent would get the full $25,000 or more, depending on their commission split.

The Reali Rebate is deposited straight into your bank account within 7-10 after closing escrow, and it’s non-taxable.

If you’re already working with an agent, you can’t take advantage of this service.

But if you feel comfortable doing it yourself, you can schedule a visit via the Reali app and get matched up with a Reali agent once you’ve found a property you like.

And all properties on the MLS are eligible, not just those listed by Reali.

Reali Cash Offer

Reali Cash Offer

If you want to give yourself a competitive edge in a seller’s market, there’s also the Reali Cash Offer, which allow you to buy a home with cash and then take out a mortgage after the fact.

Reali claims it has a 100%-win rate, beating out other buyers who either have to make a contingent offer or obtain home loan financing to close the deal.

With the Reali Cash Offer, you get pre-approved through Reali Loans, then place a non-contingent cash offer on the property backed by Reali.

Assuming your offer is accepted, you make your down payment directly to escrow and close in as little as three days.

Then you must refinance within 60 days of closing with Reali Loans or any other lender you choose.

Reali Trade-In

Reali Trade-in

But wait, there’s more. Reali also has an iBuyer feature via its Reali Trade-In program that lets you buy a replacement home before selling your existing home.

Like the Reali Cash Offer, you first get pre-approved with Reali Loans to see how much you qualify for.

Next, you work with a Reali agent to find your new home, and once you’re ready, Reali will make an all-cash offer on your behalf.

After closing, Reali will retain “ownership” of the new home until you’re ready to buy it from them.

In the meantime, you pay your old mortgage and they defer rent on the new home. It’s unclear what the rent is, but probably market rate.

While that’s happening, they inspect, stage, deep clean, and eventually list your old property for sale.

Once it sells, they give you the proceeds less a 5% fee and closing costs, and you buy back your new home from Reali at the same price they bought it for.

This compares to the 5-6% charged by real estate agents, the near-10% that Opendoor charges, and the 11%+ you might be charged by a bridge lender, per Reali.

Reali Loans

Reali Loans

In April 2019, Reali Loans was launched thanks to the company’s acquisition of Lenda, another online mortgage lender startup that surfaced in 2014.

The company stands out in that it doesn’t charge any lender fees, including $0 origination fees, $0 application fees, $0 credit report fee, and so on.

You only have to pay third party fees like title, escrow, and home appraisal, along with prepaid items like interest, taxes, and insurance.

Reali Loans seems to have competitive mortgage rates as well, and they have a neat little slider that lets you choose a lower rate with higher closing costs, or a slightly higher rate with fewer closing costs.

Their loan process also seems to be mostly digital and paperless, with a dedicated Home Loan Advisor that works with you every step of the way.

To streamline things even more, there’s also Reali Escrow, which keeps everything in-house and moving forward. Speed aside, they say it’s cheaper too, and if you’re not aware, escrow fees can be quite pricey.

All in all, Reali wants to be a one-stop shop for all your real estate and mortgage needs, which aside from convenience, should result in an overall lower cost.

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