Technology continues to make an impact on the real estate market and agents and brokers are always on the front line of the latest change.
One such shift could have serious ramifications for agents and brokers as buyers purchase homes all without a real estate agent on a site called Homie.
The company started in Utah and is moving into Phoenix, Ariz.
Co-founder and CEO Johnny Hanna said the move is the first in a longer-range plan for building a national presence.
“We’ve been perfecting our technology since we launched here in Utah and are ready to handle a new market,” Hanna said. “We plan to open up Phoenix and probably Las Vegas shortly after.”
Hanna, who previously developed the successful real estate lead-gen software Entrata, started the agent-less real estate site with a few friends in hopes of taking some of the frustration out of the process of buying and selling a home.
According to Hanna, Homie has taken over the millennial market along the Wasatch Front, the area linking a mountainous region from Provo to Ogden, Utah, since launching 18 months ago.
To date, Homie has only sold about 1,700 homes on the platform — all in the aforementioned Wasatch Front region. That’s a fraction, though a sizable one, of the 13,600 single-family homes sold in Salt Lake alone in 2016.
Utah also makes for a perfect market for something like Homie to thrive in with its newer and sprawling suburbs filled with tract homes. You don’t have to physically visit every house in the neighborhood when they’re all pretty much laid out in the same way.
And sales are up overall in the area as more people have been attracted to the state’s booming tech scene, outdoor recreation offerings and family-friendly, low-cost living.
Will Homie be able to meet with the same success in other markets?
“We looked at a lot of different markets in the U.S. and identified the ones that make the most sense,” Hanna said. “We had some of the biggest demand in Phoenix.”
Phoenix also has a lot in common with the Wasatch Front. It’s a hot market with a lot of growth potential and the same type of tract housing is popular in the area. You don’t need a human to show you the same house over and over when one is like the next and it’s more about negotiating price.
As mentioned above, Homie also handles a lot of the legal paperwork, and even offers the financing, should you need it. On top of that, the startup provides inspectors, appraisers and other services.
Homie does charge a fee of roughly $1,500 per transaction, but that’s pennies compared to the possibly $18,000 you might pay the realtor on a $300,000 home, for example.
According to Hanna, customers are saving about $10,000 on each transaction and have saved more than $17 million since Homie launched its services.
But the platform might not work as well in a market like San Francisco, where all the homes are pretty unique and are going for top dollar with not a lot of room for negotiation.
That’s where a bot may not be the best choice for getting the home of your dreams.
The company is also preparing for a Series A round of funding this spring or early summer and that cash injection will help finance further expansion, first to a select group of metro areas followed by a national effort, Hanna said.
It also faces competition from the likes of Opendoor and Faira, which also aim to streamline the process and cut out the real estate agent.
Homie presents a potential challenge for agents and brokers, but by providing service that automation cannot replicate, agents and brokers can stay ahead of tech trends.