Dan Verdi and his wife, Abby McQueeney Penamonte, were going to use the "traditional route" when they began the search for their first home.

But they stumbled upon a house being listed by ReLogic, a Denver Tech Center-based company. Its brokers work on salary instead of commissions, and listings are done for a flat fee, typically $995.

The company provides traditional services, such as posting homes on Metrolist and home staging.

"It sounded interesting, so we logged into the Web site," said Verdi, an account executive at McClain Finlon.

"The biggest appeal to us is that you get back a part of that 2.8 percent broker commission, so we thought why not?"

They've narrowed their search to a $299,000 loft in LoDo and a $274,000 home in the Highland area.

"Depending on the price at closing, we think we will save around $6,000 to $7,000," Verdi said. The typical client probably will save about $10,000, according to company officials.

ReLogic broker Adam Cox has shown Verdi and McQueeney Penamonte about 35 homes, although Verdi found the two finalists on the Internet.

A driving force behind ReLogic is that with 87 percent of people nationwide starting their search for a home on the Internet, real estate agents don't do as much as they did in the past, and so, the thinking goes, they shouldn't be paid as much.

Instead of commissions, brokers at ReLogic earn salaries, with bonuses of $40,000 to $60,000 per year. They also get benefits, including profit-sharing in ReLogic.

In addition, ReLogic brokers get reimbursed $500 a month for expenses, and the company has two Ford Escape hybrids available for brokers.

Vic Mitchell kicked off the company in January, with about $3 million of financing, including money from iSherapa, a Greenwood Village venture capital firm.

Paul Allen, the co-founder of Microsoft, owns a similar company called Redfin.

"Redfin is very high-tech, low- touch," said Ken O'Donnell, managing broker for ReLogic. "We do all of the hand-holding you would find with a traditional firm."

He compares the change to what happened to travel agents, who found their role diminished when people began booking trips on the Internet.

Mitchell, a Republican state representative for House District 45, said his own experience selling a home was the "tipping point" that led him to ReLogic.

Former companies Mitchell led include Ricochet Networks, Advantage Wireless, Motion Telecom, Advantage Cellular and Advantage Advisory.

Mitchell said he built a home in Castle Pines Village and last interviewed three agents about selling his existing home.

"They all told me the same thing," Mitchell said. "You can negotiate with us on our listing fee, but you have to pay the top co-op commission to sell your home. I thought, 'There's an economic model that is broken.' "

Gary Bauer, an independent broker, said that the salaried broker concept has been tried and has always failed. In 1990, the owner of Coldwell Banker Professionals tried it in Denver.

"They lasted less than a year without paying broker commissions," Bauer said. "While their idea is interesting, I think they're going to have a hard time still being around two years from now."

rebchookj@RockyMountainNews.comor 303-954-5207

How they stack up

Comparing ReLogic with a traditional broker for buying a $250,000 home.

* 2.8 percent buyer co-op fee paid by seller, or $7,000, for ReLogic and traditional broker.

* At closing, ReLogic charges a $5,000 processing fee but returns $2,000 to the buyer.

Or, the buyer can pay a $1,000 retainer upfront. ReLogic will credit them with $4,500, giving them $3,500 at the closing.

* Savings: $2,000

Selling a $250,000 home

* Traditional listing agent commission of 3 percent is $7,500. It is zero for ReLogic seller. The buyer-broker commission is $7,000 for a total cost of $14,500 to the seller.

* ReLogic charges a $995 enrollment fee and a $2,500 processing fee. Combined with the $7,000 broker commission, the total is $10,495 to the seller.

* Savings: $4,005