SALT LAKE CITY — It's taken real estate tech company Homie less than 18-months to climb to the No. 2 spot in the state for residential real estate listings, offering a start-to-finish package for home sellers that dispenses with commissions in lieu of a flat fee, regardless of the property's value.
Now, the Draper-based company has launched a buyer-side package that rebates the standard 3 percent commission back to the client and has also added in-house financing through its Homie loan program.
"Since we launched, our focus has been on helping people sell their homes, though we've had opportunities to assist buyers as well," Homie co-founder and CEO Johnny Hanna said. "Now, we're excited to officially introduce our buyer-side package."
Hanna said Homie provides the same services as a traditional purchaser's real estate agent, with assistance on finding comparably priced properties, putting offers together, negotiation, lining up inspections and appraisals and working through title and escrow requirements.
"Our end game is to automate the whole process," Hanna said. "By doing that, we save the client money at almost every step in the process. It really makes sense to open up our services to buyers, because most people are doing the work of finding their new home anyway."
What does differentiate the process, according to Hanna, is how costs are assessed. Instead of keeping the typical 3 percent of the home price as a buyer-side fee, Homie rebates the fee, which can be used to cover closing costs or buy down the purchaser's loan interest rate. The only requirement, Hanna said, is that the buyer pre-qualify for a Homie loan. While it doesn't obligate the applicant to finance through the company, Hanna believes many will opt to go with Homie for their financing, as well.
"We're confident that buyers will see, if they shop around, that we're giving them the best deal," Hanna said.
Nate Bray, co-founder and CEO of Salt Lake City's Brixio, a company working to shake-up the commercial real estate realm in much the same way Homie is carving out new territory in the residential arena, said he was not surprised by Homie's success and described the real estate sector as overdue for a tech makeover.
"There are key, fundamental behaviors that lead to these disruptive companies," Bray said. "These have always been lead-driven businesses. So, you have a highly networked system with someone in the middle collecting fees on, essentially, being a pivot point.
"It's just the kind of system that is a magnet for technologists to take over," he said.
Bray also noted that it's also the kind of tech disruption that is attracting a lot of attention from investors, as evidenced by the $6 billion they poured into real estate tech in 2016. Venture capitalists are working to position themselves to be on the leading edge of a market shift and, according to Bray, to "disintermediate the middle man."
Eliminating the middle man was exactly what Lanae Hooper and her family hoped to do when they recently moved from Mesa, Arizona, to Utah. They fell in love with a home in Pleasant Grove and Lanae was convinced, after doing some research, that working with Homie on the purchase was the best route to take.
"I was very interested in getting the savings on the commission and considered doing it on our own, but didn't feel comfortable with making an offer and dealing with the paperwork on my own," Hooper said.
Hooper said her husband was hesitant about going with a nontraditional option, but after a quick transaction, Hooper and her husband walked away pleased, both with their new home and their experience with Homie.
"We ended up very happy with the whole experience," Hooper said. "They were helpful, available when we needed them and just made everything right."