A former Colorado Springs Realtor has created a way to sell houses and build community — by funneling a portion of home sales to area nonprofits.
The one-of-a-kind business model, approved by the Colorado Division of Real Estate, is designed to continue allowing brokers to make money through commissions, and homeowners aren’t charged more for buying or selling a property.
“It’s beyond intriguing,” said Realtor Bryan Seale of the idea devised by former Realtor and now CEO of the nonprofit REACH Pikes Peak, John Tighe. “Nobody else in the country is doing this that we know of.”
So how does it work? With a traditional real estate transaction, brokers for each party — the buyer and seller — receive commissions. Usually, the managing brokerage houses, like Keller-Williams or RE/MAX Properties, also receive a small amount of the profits.
Seale and Tighe, along with their colleagues, developed a plan splitting the net proceeds that would normally go to the brokerage among four local nonprofits: REACH Pikes Peak, Energy Resource Center, Children’s Literacy Center and the Colorado Springs Conservatory.
“The difference with us is that 100 percent of the net profit goes to the nonprofits,” Seale said.
To make it work, Seale’s firm, Buy Sell Impact Pikes Peak – Real Estate For Good, has no office. He and the other agents conduct business on their laptops in the field, at local coffee shops or in the homes they sell. He said he doesn’t need a brick and mortar office to conduct business.
But the new nonprofit model doesn’t mean he cuts corners.
“We are full-service,” he said. “You do not get cut-rate service. It took us a year of brainstorming to structure this so it’s a win-win for everybody.”
Birth of an idea
Tighe sold real estate in Colorado Springs until the economic downturn of 2008. He closed his firm and later began working for the Pikes Peak Community Action Agency, which became REACH Pikes Peak. The nonprofit works to help low-income people and families become self-sufficient by meeting emergency needs and providing education through three offices in El Paso County.
“I’ve thought about this for a number of years,” Tighe said. “When I decided to try to do this … I had to get other agencies involved.”
A group of six nonprofit CEOs met weekly to develop the business plan and decide which nonprofits to support.
“As we grow, the potential is unlimited, really,” he said. “If it takes off, it could be licensed and franchised.”
Seale said the group chose the four nonprofits because of their reputations.
“Those were the four CEOs I knew really well,” he said. “They believed in me and I believed in them. We chose to enter a pretty daring agreement together [because it’s new and untried] that is mutually beneficial to all of them.”
He estimated that the sale of a $250,000 home could result in $600 for each of the nonprofits.
Tighe would not discuss how much money the firm has given to the nonprofits since its launch this spring. He said the real estate firm will get back its initial investment this year, and the real estate brokerage will have 10 closings by the end of the month.
The new model comes at a good time for nonprofits, as fundraising has become more difficult, said Linda Weise, founding CEO of the Colorado Springs Conservatory.
“Everyone is experiencing donor fatigue,” Weise said. The business model is a creative way to increase income while building community, she continued.
“We have a real opportunity for businesses to think differently about nonprofits,” she said. “If there’s a creative way in working together, who wouldn’t sign on for something that would elevate community? Good begets good.”
Howard Brooks of the Energy Resource Center helped design the program, and says the real estate model has potential to pay off.
“This could potentially be tens of thousands of dollars per year for each of the nonprofit organizations,” he said. “Every time I make a few thousand dollars, I can take care of one family in need.”
The Energy Resource Center helps low-income families with energy efficiency needs and ensures gas appliances are safe.
“We’re looking to be able to serve dozens of families who have immediate health and safety and energy needs. We’re really, really, really excited,” Brooks said.
And Weise says the investment in nonprofits goes even further.
“At the end of the day, look who’s benefiting,” she said. “Our kids alone [at the Conservatory], the kids with Children’s Literacy Center. That investment will come back tenfold.”
A nonprofit since 1994, the Conservatory teaches youth theater, dance, music and vocals in a safe place, according to the agency’s website.
“I’m terribly humbled to be part of the initial launching,” said Weise, who provides scholarships to students to attend after-school classes for free or at discounted rates. “I have no doubt it will be successful because everyone’s heart is in the right place.”