Tech & Startups

Dallas Real Estate Startup Called Door Raises $2.3M

The Series A round of funding came from investors including Dallas real estate developer Phillip Huffines.

Alex Doubet is founder and CEO of Door.
Alex Doubet is founder and CEO of Door.

A Dallas startup that aims to ease the burden of buying and selling a home has raised $2.3 million from investors including real estate developer Phillip Huffines.

Door, founded in 2015 by CEO Alex Doubet, charges homeowners a flat rate of $5,000, compared to the traditional 6 percent commission fee, for its brokerage services. Last year, home sellers saved an average of $15,000 under Door’s model.

The startup’s Series A round of funding, which closed March 3, was led by Robert Smith, owner of Dallas-based Sold Out Sports, a sports event ticket seller. Investors in the round included Blair Baker, managing partner at Dallas-based Precept Capital Management, and Huffines, who’d previously invested in Door. The round did not include any institutional investors and follows an $800,000 seed round of funding the company secured last year.

“It’s growing leaps and bounds,” Huffines said about the reason for his follow-up investment. “Venture capital is risky, but this concept is sound.”

Doubet, a Highland Park High School and Harvard University graduate, recognized a problem in the real estate industry when his mother sold her University Park home a few years ago. When she found a buyer, she paid 6 percent to close the deal, which amounted to $33,000.

“She didn’t get a thank-you note or bottle of wine,” Doubet said. “It was a very presumptuous, ‘Thank you for the money and goodbye.’”

So Doubet, a former history major, started researching better ways to handle selling homes. He came up with a business plan in 2015 and, using $30,000 he’d collected from the sale of apartment buildings he’d previously bought in Oak Cliff and East Dallas, he launched Door. He hired a Dallas developer to build a search tool that connects to the MLS, then began cold-calling residences whose houses were for sale by owner. To his surprise, his first call in February 2016 landed him his first listing. Door has been generating revenue ever since.

The company now employs nine full-time agents and has a run rate of $1 million to $2 million for 2017, Doubet said. Door is only expected to grow, as Doubet launches new marketing campaigns, hires more agents, and rolls out new software features with the latest funding. New features will allow sellers to have access to the marketing data of their homes. This means they’ll be able to see how many views it’s received, how many showings it’s had, and get feedback from the showings. Doubet also expects to start development on a mobile application.

But it’s Door’s business model that will do most of the work, Doubet said. The company not only aims to ease the burden of selling for the owner; it also helps the buyer with purchasing. Using Door’s system, buyers can curate property listings, instantly request a showing with a Door agent, and also get quoted on a rebate. Buyers get about 1.3 percent back after their deal closes.

“When you look at industries disrupted by tech, it takes about five to 10 years” to take effect, Doubet said. “Old-fashioned agents have their collective heads in the sand. They don’t think [disruption] is going to happen, but no one likes paying high fees.”

And, with the new funds and plans in place, Doubet expects to overcome the biggest obstacle Door has: “Getting in front of a lot of people.”

Comments

  • Seems like your mom hired the wrong agent. Service will be compromised for luxury homes and $5k is over the 6% commission for property less than $95k which includes a lot of markets.
    As an agent who loves to market effectively and get the most for their clients, I wouldn’t show a home with flat rate commission. Service is compromised with discount brokers. Flat rate is not disruptive, its an age old idea that exists today.

    • Lori Richardson

      From one agent to another you will be doing your clients a grave disservice if you refuse to show a home simply because it is listed with an agency that offers a ‘flat fee’ rate. You will also be violating your responsibilities as a Realtor; you have a legal obligation to represent the best interests of your client, not yourself and your compensation. And ‘your’ compensation as a buyer’s agent is the same regardless. So what gives with that reasoning? In addition, what do you base your assumption on when stating that ‘service is compromised’ when using a ‘flat fee’ brokerage? That is not the result of buyers and sellers who have worked with these brokerages; you can read the on-line reviews or speak with others who have experienced the difference[s]. With respect to homes priced less that $95K [actually, $168K is the breaking point for a $5K fee] – those can be negotiated and aren’t really a factor in the Dallas market.

  • Lori Richardson

    Portool, you’re pretty much on target with your response except for the idea that in a market downturn a ‘flat fee’ brokerage will see tremendous trouble. When you contemplate a downturn in the market and recognize that home equity will slow, you might just see that a ‘flat fee’ brokerage thrives then. As long as the service provided is on par with a more traditional brokerage firm the savings in commissions paid may be the tipping factor in who gets the listing and/or sale. Just a thought…….