Saying that advancements in computer technology have changed the way consumers conduct transactions is quite the understatement. Going back to the Industrial Revolution, consumer goods, brands, and categories have all been affected (some killed!) by improvements in technology and methodology.
This happened during the dot-com boom of the early 2000s, when service industry staples such as travel agents, found themselves on the short end of the disintermediation stick. Improved technology is a double-edged sword; for every thriving startup, there’s also a tech casualty, such as Blockbuster or Kodak.
Real Estate “Disruptors”
One category that seemed to dodge the tech “disruptor” bullet was real estate, where the traditional use of a full-service agent in most transactions, persevered and still remains strong.
Zillow, of course, shook things up with their popular, yet controversial “Zestimates.” But at its core, Zillow is a listing portal and information site, and even agents began to embrace it as a tool.
There are, however, especially in the last half-decade or so, many emerging, non-traditional real estate options.
These industry “disruptors” aren’t just about property details or crammed with listing feeds. We’re talking about options that affect the transaction itself. Innovative, data-driven, customer-centric ways that are flipping traditional real estate practices on their head. Massive change is coming to the real estate industry and consumers seem to like it.
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How Real Estate Stiff-Armed Tech For So Long
How did real estate fend off tech for so long? Most likely it was due to the size and complexity of the average real estate transaction. Buying a bobblehead on eBay or Amazon is one thing, buying a half million dollar property is another. Change doesn’t come about overnight, especially when lots of zeros and commas are involved.
For years, real estate industry vets would scoff at the threat of tech’s ability to change the real estate industry. “You can’t buy a home with the click of a button” was heard more than once among Realtors, brokers and other industry types.
However, that argument is starting to show some cracks. At some point, there were naysayers in every industry who said you’ll never be able to trade stocks, do your banking, get a ride, wire money, or buy a car electronically. Nowadays, you can do all of that and more with simply a click or two on your phone.
Real estate is ripe for change, and here it comes…
How Tech Is Fueling Non-Traditional Real Estate Options
Real estate industry disruptors are becoming quite popular with consumers, and more and more are popping up each day. These new, emerging players in the real estate game have most or many of these features/benefits in common, as they:
- Utilize technology and make initial contact with their customers online or through an app
- Use machine learning, data mining, and AI algorithms to analyze and predict consumer real estate behavior and tendencies
- Simplify the complexity of real estate transactions
- Put more control in the hands of the buyer/seller
- Give consumers more choices
- Are well-funded by investors and venture capitalist money
- Offer local agents as part of their process, creating a tech/human hybrid model that helps ease consumer’s minds
Here’s a look (alphabetically) at some of the emerging, non-traditional real estate companies that are gaining traction with consumers in the U.S.:
Auction.com started doing business back in 2007, and its main office is in Irvine, California, with many support locations throughout the U.S.
Auction.com’s path to success is a classic “right time, right place” story, in that when the site launched, the housing market took a downturn and a flood of distressed properties hit the market. It is the nation’s number one real estate marketplace that deals specifically with the online auction sale of bank-owned and foreclosure properties.
With a reported $34 billion in sales and 3.5 million registered users, Auction.com is an industry leader and its process is easy to use, agile and transparent. Online buyers (investors, for the most part) bid and buy homes and commercial properties via a high-tech platform that utilizes both data intelligence and mobile technology.
Compass started up in 2012, and has corporate offices in New York and LA, while their services are offered nationwide in many major cities and markets. They employ more than 2,000 real estate agents and act as a brokerage, but they are not your typical, traditional real estate operation.
Compass is a fast-growing real estate tech firm that arms their agents with cutting-edge technical support in order for them to be more successful and efficient. They’re all in on improving workflow and productivity for their agents via software and an end-to-end digital platform. Compass is also said to be the first real estate company to provide their agents with a proprietary mobile app.
Recently, Compass unveiled their plans for new, digital, “smart” for sale signs. The signs differ from traditional yard arm signs in many ways, including being round (like a Compass!). They also light up through motion activation and send Compass app users listing information if they get close to the sign.
Established in Texas in 2015, Door serves North Texas, Austin, San Antonio, and Houston markets. Door is a flat-fee, full-service real estate platform that charges sellers $5,000 and offers buyers a 50% commission refund at closing.
Door’s licensed, non-commissioned, professional agents are dedicated to servicing their clients, instead of seeking leads and making inflated commissions. This no-nonsense approach enables Door to close more sales at a higher volume, and the savings are passed onto each customer.
EasyKnock is a different take on direct home buying in that they specialize in letting homeowners access their home’s equity.
Referred to as an “equity release solution”, what EasyKnock does is buy your home, and then they rent it back to you. Customers sign a lease, don’t have to move, and get access to some of the equity from their home. At the end of the lease period, customers can either walk away from the home (and still get the remainder of their equity when EasyKnock sells the home) or they can repurchase their home.
Fizber is a specialized For Sale By Owner (FSBO) service that provides guidance and support, from listing to closing. They offer comprehensive, easy-to-use tools that are designed to maximize exposure and simplify the home sales process.
Their services include a flat-fee MLS listing, listing your house for free on their site, a complimentary home valuation, professional marketing solutions and help to find local real estate professionals to aid in the sales process. The company has also recently begun to offer social media listings and ads as a way to boost FSBO property exposure.
Home Bay, headquartered in North County San Diego, got its start in the flat-fee real estate business in 2015. They refer to their services as “high tech, high touch guided solutions” and cover markets in the states of California, Florida, Georgia, Illinois, and Texas.
For a listing flat-fee that starts at $2000, Home Bay has a team of centralized agents and real estate experts who guide and help their clients through the transaction process, without ever stepping foot in your actual home. Sellers manage and stay on top of their transaction through an online dashboard, where they can order yard signs, schedule open houses, make counter offers and much more.
Founded in 2012, Homelight has main offices in San Francisco and Phoenix and serves 34 major U.S. markets. Homelight is a free website that matches homebuyers and sellers with top-notch real estate agents.
As an agent-matching marketplace/portal, Homelight uses big data, customer and peer-to-peer reviews and sales records to offer their clients unbiased, personalized local agent recommendations. Over two million agents with a history of close to 30 million transactions make up the Homelight database.
Founded in Santa Monica, California in 2015, Homelister is an A’ la carte slash For Sale By Owner site, where home sellers can pick and choose what services and support they want to market and service their home sale.
Homelister proclaims that using their site can make the user a “Do It Yourself” real estate agent. Access to automated tools lets the customer list their home on the MLS, implement marketing plans, use a lockbox for buyers and agents to enter their home, take professional photos, and the list goes on. All under the umbrella of putting customers in control and saving them money.
Homie started doing business in 2015 and serves quite a few markets in Utah, with eyes on launching in Phoenix, AZ soon. The friendly-named company is a flat-fee, full-service real estate site.
As a company, Homie seeks to make the buying and selling experience easier and more affordable for consumers. For a flat fee of $1399 (not including buyer commission fees), they cover everything from photos to signs to legal advice. The majority of the transaction is handled online, with support from real estate experts and agents when needed.
Houwzer is a flat-fee, buyer rebate real estate company that got its start in 2015. An east coast focused real estate/tech disruptor, Houwzer operates in the Washing D.C., Philly, and New Jersey markets.
Houwzer’s hook is that they’ll help customers sell their home for a low fee, $2500, which they claim they’re breaking even on. Then, after the home closes, they’re banking on the same customer to also buy a home through them, which is where they will indeed make a profit. To make it even easier, Houwzer offers their home selling clients a $2500 buyer rebate that the customer can use themselves or gift to a friend or family member.
Knock hit the tech/real estate scene in 2015, garnering lots of buzz because the businesses co-founders are made up of Trulia and Yahoo Real Estate founders.
The company flips the traditional real estate process on its head. Knock’s major point of differentiation is the ability for a consumer to move to a new house, BEFORE selling their current house. They help you buy your new home, and then you begin the process of selling your previous home. Being empty at that point, your old home is easier to repair and show, plus there’s no need for staging. And if either your new or your old home needs repairs, Knock takes care of that, too.
ListingSpark got its start in 2013 and is headquartered in Austin, Texas. Listing Spark is an A’ La Carte real estate service whose mission is to streamline real estate transactions by putting the seller in control of what they need and what they don’t.
ListingSparks’s menu of services starts with their “Core” level, which offers all the basics that sellers need to sell their own home. It’s available for only $7 per day. Their clients can also add services that they want, such HD video tours for $225, an agent-led open house for $199 and a “closing expert” for $1500, which basically means the seller is adding a dedicated agent to guide them through each step of the transaction.
Launched in 2014, Offerpad’s promise is to reinvent the traditional real estate transaction process by offering convenience, control, and certainty. The “iBuyer” company accomplishes this by removing home seller stress and uncertainties such as stagings, showings, and deal-killing contingencies.
They also offer great flexibility when it comes to timing the closing date and when the seller has to move. Their “Extended Stay” program is sort of like a late hotel check out for closing on a home. If your new home isn’t ready, it’s no problem. Offerpad allows you up to three days to move to your new home.
Speaking of moving, Offerpad also throws in an extra nice incentive for using their business—they pay for your move! That’s right, sell your home through Offerpad and they will cover the cost to have a professional moving company move you.
Established in 2014, and currently operating in 13 cities across the nation, Opendoor specializes in direct home buying. Their goal for every client and transaction is simplicity and ease. Opendoor enables its clients to sell on their own timeline without ever listing their property on the market. No stagings, showings or months of uncertainty.
Sellers simply fill out a form online, then Opendoor determines the value of their home (through neighborhood comparables, property tax information and a bit of machine learning) and then make a fair offer to purchase it. If accepted, sellers can expect to close on their own timeline, with zero worries about contingencies or deals falling through.
They also offer the Opendoor Trade-In program, where customers can choose any home on the market (not just an Opendoor home), sell their current home to Opendoor, and close on both homes in the same day.
Open Listings is a buyer-only site, which started in Los Angeles in 2015, but also has offices in San Diego and San Francisco. Its main selling point is that the service is free to try, and once customers actually purchase a home and the transaction closes, Open Listings refunds the homebuyer half of the commission fees
Buyers go to their site, fill out some info, and then have access to a personalized list of properties for sale. Homes that are conducting open houses, ones that match their personal preference, are also emailed directly to the prospective buyer. Open Listings supports their buyers with traditional real estate agents, but the onus is on the buyer to use their site to narrow down and find the home they want.
Perch, founded in 2015, directly buys properties from home sellers in the San Antonio, Texas market. The company’s philosophy is that the traditional real estate process is ripe and overdue for a change. Instead of an anxiety-laden experience that can take months, Perch offers a modern alternative to home selling.
True to the iBuyer model, Perch connects with customers online, makes them a “market price” offer, then closes the deal free of things such as home repairs, showings, and deal-breaking contingencies.
Founded in London in 2012, Purplebricks has handled billions in home sales, making it the largest online real estate company in the U.K. It launched across the pond in late 2017, hitting the U.S. market with an aggressive broadcast marketing media plan.
Purplebricks is a full-service, flat-fee, “discount” model that is also a hybrid model. Local real estate agents make up the Purplebricks network and are awarded exclusive zip code territories. For a fee of around $3200, the company offers services such as 3-D virtual tours, professional photography, staging tips, guide home tours and property listings on popular portals.
Reali, launched in 2015, is a flat-fee, full-service real estate company that bases its fee on the listing price of your home. Based in San Mateo, Reali currently operates in the San Francisco Bay Area, the city of Roseville and San Diego.
Reali combines real estate expertise with leading tech power by providing homebuyers and sellers an app where they can view and manage every step of the process. Their mission is to save buyers and sellers money and make the entire home transaction process as seamless, hassle-free and transparent as possible.
Since 2011, Redefy has been an innovator in the full-service, flat-fee model. They offer all the same services as a traditional, full-service agent, but offer significant savings on the listing part of the transaction. List your home with Redefy and you pay only $3000 (plus the buyer’s agent fee and title fees).
Although they didn’t invent the flat-fee model, they are the first to take it to a national level. Their team of local agents helps the seller each step of the way, with expert guidance on pricing, marketing, showings, contracts, inspections, negotiations and more. They do not, however, hold open houses or print flyers, as they feel that are an antiquated part of the home selling process.
Redfin, founded in Seattle in 2006, is the tech-centric real estate veteran. Initially marketed as a “discount” agent/brokerage, Refin stood out by offering lower fees and video tours of their homes.
Present day, Redfin services 80 U.S. markets and handles billions in home sales transactions. They have also evolved into a full-service, one-stop-shopping real estate service. Their mix of technology, listings search, agents, brokers, and mortgage services puts them in a position not many other “disruptors” can claim.
The company has also earned high praise for its digital “Deal Room” which enables all aspects of a transaction, including the agents, the customer, and the title company, to be transparently tracked and kept up-to-date.
Redfin Now works like most cash offer businesses: home sellers fill out a form, Redfin comes back to them with an offer within 48 hours, the seller agrees and closing happens fast.
This new offshoot of Redfin believes their years of experience with technology and online real estate, coupled with expert, local agents can give them an edge in the burgeoning “iBuyer” segment.
One of the newer players to hit the market, REX (Real Estate Exchange) is a hybrid, “discount” real estate service that claims to only charge a 2% commission fee (vs. the usual 5-7%).
One of REX’s unique selling points is that it does not enter homes onto the MLS (Multiple Listing Service). Instead, REX uses advanced machine learning AI and data crunching to creatively market your home through a slew of various channels, including traditional and digital marketing, top listing sites and social media.
The company also has dedicated REX agents who help their clients with a free home valuation report, take photographs of the home, conduct open houses and help negotiate counter offers.
Sidedoor.com is a FSBO peer-to-peer marketplace site that lets users buy and sell properties online, commission and agent free. The company launched in 2015, in Denver, Colorado with plans to service the Chicago area soon.
Sidedoor, as their name implies, looks to help FSBOs by eliminating real estate middlemen. With no brokers, Realtors or MLS listings allowed, Sidedoor is a strictly FSBO site that provides For Sale By Owners with tools, guidance, and access to lenders, lawyers and title companies.
Thanks to all these “disruptors”, there are more real estate options, choices, and variations than ever before. However, sometimes too many choices can lead to indecision.
To help cut down on all this customer confusion, Sold.com was born. Sold.com is based in Irvine, California and will launch in test markets in the fourth quarter of 2018, with a national launch set for the spring of 2019.
Sold.com is not a transaction based real estate site. Rather, it is a seller-focused, completely free experience that offers comprehensive and trustworthy resources to help sellers make their best home selling decision.
Sold.com has designed a methodology that understands who the seller is and what kind of home-selling situation is best. When visitors complete the Home Seller Quiz, they are provided with a completely unbiased recommendation that suits their best interests as a home seller.
Sold.com guides, shows, and offers customers the connections, and the confidence, to go from seller to “sold.” Because home selling doesn’t need to be that hard.
Founded by the former founder and CEO of Redfin, Surefield launched in 2013 in Seattle. For now, the company only operates in the state of Washington.
Surefield’s core belief is that U.S. housing customers pay too much for real estate transactions. This is why they list any home for 1.5% and customers only pay if the home closes. They also let the home seller determine the buyer’s agent commission, as low as one dollar.
On the tech side, Surefield offers detailed 3D virtual tours, enabling buyers to tour a home without setting foot into it. They also offer a home pricing/comp tool, called Pricepoint. It helps buyers set their price by displaying 10 recently completed listings along with 10 active listings.
Trelora, based out of Denver, Colorado, is a full-service, flat-fee real estate company. Their goal is to provide residential home sellers with options, transparency, and results.
Trelora combines advanced technology with a team of real estate task specialists. One inclusive fee gets customers everything expected from a full-service agent, plus access to Trelora’s digital dashboard that keeps every note and document about the property and the transaction, in one convenient place for all to see.
TripleMint opened in 2011 and is headquartered in New York City. They operate as a full-service real estate brokerage that is fully immersed in agent software technology. Their vision is to use technology and human real estate experts to form a hybrid model that takes an aging, off-line industry, online.
TripleMint’s online platform combines smart listing search tools with a real-world team of real estate agents to make the end-to-end real estate experience more efficient and less costly.
USREALTY.com is an A’ La Carte, DIY listing site. In business since 1999, they have been around the real estate dot com scene for some time.
USREALTY.com operates by letting the home seller choose the pricing plan that works best for them. Their “Starter” plan offers sellers their minimum services, such as an MLS listing, photos, and live phone support. Other plans offer more on top of that, with “Basic”, “Deluxe” and “Premium” plans to offer additional value and services, from yard signs to no cancellation fees.
Based in Dallas, Texas, Xome became a player in the flat-fee and online real estate auction market in 2015.
For a one time of $599, Xome’s “Super Seller” system offers full-services from a local agent and a listing on the MLS. For a flat fee, the seller’s property is exposed to millions of serious buyers via popular, national listing sites and it’s also prominently featured on the Xome Offer Marketplace, an online auction site.
Zillow Instant Offers
Zillow, the online real estate listing and information giant, has entered the direct home buying market with “Zillow Instant Offers.” The service is currently available in Phoenix, Arizona, and Las Vegas, Nevada, with plans to expand in the works.
Zillow’s goal is to put the ball completely in the seller’s court. Once sellers receive their cash offer, they are also followed up with by a visit from a traditional real estate agent. The agent will then share a CMA (Comparative Market Analysis) on the seller’s property, giving them peace of mind to help them make their decision.
By including agents in the process, Zillow Instant Offers differs slightly from some of the other “iBuyer” players. A move Zillow feels will help sellers feel more comfortable and confident with the process as a whole.