Faira is a tech-driven real estate company, based in Washington state, that uses an online auction platform to market and sell their listings. Anyone can log onto Faira, post their home, and let buyers bid up the price.
It’s a radical concept – so how well does it work? Well, since the beginning of the pandemic, Faira has pulled out of California and Arizona, and currently only handles properties in Washington state.
A lot of that pullback was probably caused by the economic turbulence that’s affected every business. But you can’t ignore Faira’s business model— everything from disingenuous property listings, to hidden fees— which we’ll discuss in more detail below.
We’ll also discuss how exactly the Faira sale process works, their standard fees and packages, how Faira works for buyers, and Faira’s main pros and cons.
- What Is Faira?
- How Does Faira Make Money?
- Faira Pricing and Fees
- How Does Faira Work for Home Sellers?
- Faira Customer Experience
- How Does Faira Work for Home Buyers?
- Faira Pros and Cons
- Faira Reviews
- Faira vs. Redfin
- Faira vs. Clever
What Is Faira?
Faira was co-founded in 2015 by a former Ebay employee, which explains their auction-based platform. Faira’s approach to the home sale industry is to cut out the middleman by letting buyers bid directly on properties, via the internet, and to employ an unprecedented degree of transparency by making everything from disclosure forms to home inspection reports viewable through each property’s listing.
By making the buying and selling process more open and accessible, their hope is to make home sales a little easier and a little more – wait for it – Faira.
Faira offers three main packages, which cost from 0.5% up to 3.5%, and offer services ranging from those on par with a flat fee MLS or FSBO service, up to a deluxe full-service sale experience. Sellers should note that, regardless of which Faira package they opt for, they’ll still be on the hook for the standard 3% buyer’s agent commission.
First, let’s look at how Faira makes their money. Then, let’s break down each service package they offer, as well as what sellers at each level get for their money.
How Does Faira Make Money?
Faira’s bread and butter is their 0.5% platform fee that they charge for every sale, regardless of what package the seller chooses. Yes, even if they choose the Faira Free option, it’s not actually free— the seller will have to pay that 0.5% platform fee.
For a home that sells at the median U.S. home value of $252,000, that 0.5% comes to $1,350 that goes to Faira, just as the price of admission onto the platform. Faira then makes more if sellers opt for more expensive packages.
This is similar to Ebay’s business model, which also charges a small fee for each sale completed on their platform. Scaled up enough, this can be the foundation of a billion-dollar business. Faira isn’t quite there yet, though.
Faira Pricing and Fees
Faira’s most barebones package is Faira Free. It’s the equivalent of a flat fee MLS listing service, where you pay a flat fee, and your home is listed on the MLS for you, as well as on Faira’s platform. You’ll receive yard signs, a lockbox, professional photographs from your listing, but you won’t receive any help from an agent.
That means the bulk of the sale— marketing, showings, price negotiation, and closing— is up to you.
There are no listing agent fees if you opt for the Faira Free package, but you will have to pay the 3% buyer’s agent commission (usually 3%), plus Faira’s platform fee of 0.5%.
While Faira Free does resemble a flat fee MLS service, it does have one decisive advantage over those services; sellers who opt for Faira Free won’t pay anything upfront, only paying if their home sells. That alone should be enough for anyone considering a flat fee MLS sale to give Faira Free a long look.
Sellers should also note that if they accept an offer that doesn’t come through the Faira platform, they’ll have to pay an additional 1% charge, bringing their total payment to Faira up to 1.5% (1% fee for outside offer, plus 0.5% platform fee).
The next tier of services is Faira One; this package includes everything in Faira Free, plus the services of a real estate agent and a home inspection. Your agent, however, will be remote; while they’ll guide you through the sale process and handle negotiations, they won’t be assisting you in person.
This package comes with a 1% listing fee, plus the 0.5% platform fee, for a total of 1.5%. Sellers should note that if they accept an outside offer after opting for the Faira Free package, they’ll end up paying the same amount as if they’d upgraded to this package in the first place. That means that, if you do go with the free package, you should decide beforehand that you’ll only accept offers through the Faira platform.
Finally, the highest level of services that Faira offers is the Faira Premium package. Faira Premium includes everything in the first two packages, plus deluxe photo options, an in-home agent consultation, and a home warranty.
This is the closest thing Faira offers to a full-service sale experience, and it’s more or less equivalent to a top of the line agent-assisted sale. The only drawback is that it actually costs more than a conventional full-service transaction.
Faira Premium costs 3% for the listing agent, 3% for the buyer’s agent, and 0.5% for Faira’s platform fee, for a total of 6.5% in total commission. A conventional transaction costs between 5 and 6%.
To go with Faira Premium over a seasoned, full price agent, you’d have to believe that the Faira platform offered something exceptional— perhaps the potential for an online bidding war for your property. Otherwise, it’s hard to see why any seller would opt to pay more commission for what’s essentially a standard full-service sale experience.
How Does Faira Work for Home Sellers?
If you sign with Faira, the first step will be to sign a listing agreement. This gives Faira 90 days exclusive access to your listing; if you break this exclusivity during the 90 days, you’ll be on the hook for a financial penalty of 1.5% of your list price.
Once you’ve signed your listing agreement, you then log into your Faira seller dashboard, which will include an itemized guide on how to get your home ready for the market.
All Faira sellers— those who opt for the Free, One, and Premium packages— get professional photos taken of their home, and Faira staff will put “for sale” signs on their property.
Premium users are also eligible to have drone or video tours produced for their property.
One and Premium users also get a home inspection as part of their package. This will help pinpoint that probable market value of the home, but the report produced by the inspection is also uploaded onto your property’s listing, where it’ll be viewable by anyone interested in bidding.
Next, you’ll set your price.
Your Faira dashboard will display three different variations of your list price:
- The MLS Listing Price, which includes the 3% buyer’s commission, plus the 0.5% platform fee.
- The Buyer Without Agent Price, which includes only the 0.5% platform fee (no buyer’s agent means no buyer’s agent commission).
- The Base Asking Price, which is the basic list price without any fees or commission added in.
One and Premium users will also see an estimate of net proceeds.
This is the point where you’ll also fill out your listing with any photos you want to upload, and with a written listing description.
Once your price is set and your listing is ready to go live, you’ll move onto open houses. If you opted for the One or Premium packages, Faira will send someone, either an agent or a third party vendor, to run your open houses for you. If you opted for Faira Free, you’ll have to handle your open houses yourself.
After your listing goes live, and you have some open houses, offers should start rolling in. Any offers you receive through the Faira platform expire after 24 hours, unless you choose to have an “offer review period,” which is a time when you’ll review all offers. (Those offers will expire 24 hours after the beginning of the offer review period.)
After you accept your preferred offer, the buyer has five days to pay the 0.5% platform fee, at which point, the purchase and sale agreements can be signed to finalize the transaction.
This is also a good spot to delve into the 0.5% platform fee a little more. Although Faira’s position is that the platform fee is paid by the buyer, that fee is baked into the price from their perspective, meaning that that money would otherwise be going into the seller’s pocket.
This is similar to how conventional real estate commission works; conventional commission is paid out of the seller’s proceeds, which is money the seller received from the buyer. And yet when people talk about conventional real estate commission, they say that it was paid by the seller. In this light, Faira’s claim that the 0.5% platform fee is paid by the buyer seems like, at best, disingenuous semantics and, at worst, actively deceptive.
Faira Customer Experience
So do Faira’s three packages actually offer better value than existing conventional options? Let’s take a closer look.
The Faira Free Package
As we said above, Faira Free is basically the equivalent to a flat fee MLS service; it gets your home listed on the MLS, and you receive some basic assistance like signs, a lockbox, photos, etc.
In one way, it’s actually superior to most flat fee MLS services; you don’t pay any upfront fee. Flat fee MLS services charge you a non-refundable fee in advance, usually a few hundred dollars— but with Faira Free, you don’t pay at all unless your home sells.
Keep in mind, however, that if your home does sell, Faira Free charges a 0.5% platform fee, which is most likely going to be more than you would’ve paid for a flat fee MLS service. For a home that sells at the U.S. median home value of $252,000, that 0.5% platform fee will come to $1,260, while flat fee MLS services are usually around $299.
Still, it can be easier to pay a higher fee out of money you just received for your home, rather than paying a lower fee up front, out of pocket, for a sale that may not happen.
The Faira One Package
To recap, Faira One charges a 1% listing fee, plus the 0.5% platform fee. For a total of 1.5%, sellers receive everything in the Faira Free package, plus agent assistance— though that agent will be 100% remote. For a home at the U.S. median value of $252,000, that 1.5% comes to $3,780.
To be frank, this package doesn’t offer great value. Most discount real estate brokerages will charge the same, or even less, and give you more. For example, Redfin charges the same 1.5%, but will pair you with a face-to-face agent, and you’ll also receive support from Redfin’s office and infrastructure. While there are some concerns about Redfin agents’ financial incentives (Redfin agents are salaried, so they make the same amount of money no matter how much your home sells for), a face-to-face agent experience is always going to be better than a remote one.
On the other hand, companies like Clever Real Estate will pair you with an elite local agent for a flat fee of $3,000, or 1% if your home sells for more than $350,000, and sellers receive a face-to-face, full service sale experience.
P.S. We’ve partnered with Clever to offer top-rated agents who’ll work for $3000 or 1%. Learn how to save thousands and still get a full-service experience.
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Unless you believe the Faira auction platform provides a ton of value for your property, this package doesn’t make much sense.
The Faira Premium Package
Faira’s Premium package charges 3% for the listing agent, 3% for the buyer’s agent, and 0.5% for Faira’s platform fee; that’s a total of 6.5%.
A conventional real estate commission, paid to the agent of your choice for a full service, all-inclusive sale experience, is only 6%.
This package not only doesn’t offer any savings; it’s actually more expensive than conventional commission. The only reason to use this package is if you strongly believed in the Faira auction platform’s potential to bid up the price of your home, and if you also wanted an agent to advise you through the entire process.
How Does Faira Work for Home Buyers?
Buying with Faira is fairly straightforward.
If you already have a Faira-listed property picked out, you can go with Faira Essentials. Opting for this package gets you assistance from Faira staff submitting and negotiating offers, and filling out sale paperwork.
Once the sale goes through, buyers can receive up to a 2% rebate. This is higher than the buyer rebate offered by most of Faira’s competitors; just keep in mind that a buyer’s rebate can only be allocated towards certain closing costs, so it’s unlikely that the lender will allow it to be pocketed as cash.
One more thing— if you want to see any properties, Faira will charge $99 per showing. Note that this fee can add up quickly in a competitive market where you’re seeing several showings a week and putting in offers on different properties. Agents won’t charge you anything to see a property, and the seller covers your costs.
If you opt for the Faira Plus buyer package, you’ll view homes with the assistance of an agent, with no additional charge per showing. They’ll also help you with closing and negotiating. Your rebate, however, will be capped at 1%.
Either way, if you buy through Faira, you’ll be eligible for a buyer’s rebate that’s on par with or better than the industry standard. The only downside? Faira doesn’t have many listings right now, so you don’t have many properties to choose from.
Faira Pros and Cons
Let’s take stock of some of the upsides and drawbacks of working with Faira.
- Faira’s free package, which is comparable to a flat fee MLS service, doesn’t charge up front— sellers only pay if their home sells.
- Faira agents work on commission, not on salary, so their financial incentives are aligned with the sellers, i.e. it’s in everyone’s best interests for the home to sell for as much as possible
- Faira buyers are eligible for a rebate— potentially up to 2%
- Faira’s auction platform has potential to spark a bidding war
- The way Faira frames their platform fee as “paid by the buyer” could be seen as misleading
- Faira’s full service option, Faira Premium, is actually more expensive than a traditional real estate agent, but doesn’t offer more value
- Faira’s buyer program, Faira Essentials, charges $99 per showing— an exorbitant fee when you consider a conventional buyer’s agent charges nothing
- Faira Free users must pay a penalty if they accept an offer made outside Faira’s system
- Faira’s online auction system may be daunting to navigate for some buyers
- Faira is only available in Washington state, and at present does not have many live listings
Surveying Faira’s reviews across Yelp, Google, and Zillow can give us an accurate picture of the company’s strengths and weaknesses. Overall, Faira has decent reviews: 4.8 out of 5 on Zillow, based on 38 reviews, 4.2 out of 5 on Google, based on 88 reviews, and 2.5 out of 5 on Yelp, based on 7 reviews.
Let’s look at some representative reviews.
This negative review from Zillow suggests that, while the agents are very personable, Faira may have some shortcomings when it comes to accurately valuing a property— which is, after all, one of the most important steps in the sale process.
An Ideal Transaction
This positive review from Zillow depicts an ideal Faira transaction; good rapport with the agent, responsive communication, and help overcoming various obstacles.
Hidden Fees, and a Confusing Interface
This negative Yelp review reinforces some of the pros and cons we discussed above; that the platform fee is baked into the price of the home, and thus comes out of the seller’s pocket, and that the cutting-edge platform can be daunting to some buyers.
Low Commission— and Low Effort
This negative review from Google paints a picture of an agent working for a cut-rate commission and turning in a cut-rate effort. While this may not be representative of all Faira agents, it’s definitely cause for concern.
A Generous Buyer Rebate
This positive review from Google shows how powerful the buyer’s rebate can be— this buyer saved more than $11,000 from their 1.5% credit at closing.
Faira vs. Redfin
Redfin’s standard listing fee is 1.5%, which is on par with Faira’s “Faira One” package, which charges 1%, plus a 0.5% platform fee.
But for Redfin’s 1.5%, sellers work with a designated agent, and are supported by the Redfin office team throughout the process. For Faira’s 1.5%, they only receive remote agent support. This alone tips the balance heavily in Redfin’s direction; working with an agent in person is always going to be preferable to remote support.
And then there’s the issue of size. Redfin is a national company, with thousands of employees; Faira is much smaller, and their agents are essentially working as independent contractors— meaning they don’t have a large staff backing them up. Redfin maintains a robust support team, who work behind the scenes to support every sale.
Unless the Faira auction platform has huge importance to you, Redfin seems to have a definitive edge over Faira.
Faira vs. Clever
Faira’s full service sale package, Faira Premium, charges 3% for the listing agent, 3% for the buyer’s agent, and 0.5% as a platform fee. That’s 6.5% in total— more than you’d pay for a traditional full service agent.
Clever Real Estate offers a full service sale experience with an elite, pre-vetted agent, for a flat fee of $3,000, or 1% if your home sells for more than $350,000, plus the 3% buyer’s commission.
For a home that sells at the U.S. median home value of $252,000, Clever would charge $7,560 (3% buyer’s commission) plus a $3,000 flat fee, for a total of 10,560.
That same home sale through Faira would cost $16,380, or nearly $6,000 more.
And keep in mind that Clever carefully screens their agents, to make sure they’re in the top 5% of their market; the same can’t be said for Faira. So Clever agents not only cost less, they’re very likely much more experienced and much more productive than Faira’s agents.
Real Estate Witch has partnered with Clever Real Estate to help our readers access a full service sale experience for a low, flat fee. Clever offers a top of the line sale experience with an elite agent, for much less than a conventional agent— which means they’ll ensure that your home sells for the absolute maximum, while letting you keep as much of that money as possible. It’s a win-win.
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