It's hard to know if this business model will stand the test of time.
Currently Utah is in a boom cycle and anything thrown on the market sells
immediately.Let's see how this idea weathers a few down cycles
before making a judgement!
I've been loving this business model since I first started spotting their
billboards on I-15. I haven't used realtors in recent transactions and the
other side of the transaction always recognizes it and cuts the price
accordingly. Realtors that exist in the future will make $1000-$2000 flat fees.
The percentages will dissapear. As others have said, you can take a 3-6 week
course to become a realtor and then overnight you have the ability to earn $500+
per hr worked on the deal. So someone can go to the best medical schools and
specialize and leave college after 12-16 years, hundreds of thousands in school
loans, and have the chance to earn $100-$250 per hour. Or you can go get a
"license" as a realtor and make more money per hour. This dated model
has created plenty of suckers. Everyone in the job market should spend time and
get a license. It's the most lucrative 3 weeks you will spend in your
entire life. Nothing comes close that I have heard of. If we were all realtors
there wouldn't be a need for them. And fine by me, we'd all be saving
our 6%. For people that you likely just met and will never speak to again. If
we're going to give 6% of our money why not give it to charity?
I would have to agree with the consensus that my first real estate agent
shouldn't have received his 3% (he gets 3%, and the other agent gets 3%
generally). Our home was of such a small amount that he didn't want to
spend ANY time dealing with us. The last agent I used earned every
penny he got, I wouldn't have had it any other way. He went above and
beyond explaining everything, including any option we were wanting to take as
the negotiations became a little complicated. Homie may be a good option, but
for me I can't imagine doing anything other than using my agent.
Sadly, what will keep this from being expanded in many states (and I count mine
as top of the list in regulating this out where possible) is the made by the
state in real estate licensing fees and taxes on realtors and businesses. But if
faster turnover of properties is a result, the state can get access to increased
property taxes faster. While there is "concern" over prices being too
high for many to buy, dropping the cost by that much will remove a huge barrier
to entry. However, money talks (to politicians)...I purchased a mid
400K home in 4 days. It's hard to imagine the fees associated with the
transaction amortized over that time. That said, my realtor was present for the
numerous inspections (I was at the whole house inspection), provided me links to
good people in finance and other trades when I needed them, and I leveraged his
long experience in the industry and the relationships he had to help me land a
house in a very competitive market.If Homie's paperwork can
survive litigious buyers and sellers, then the risk is minimized. Having a
lawyer available is fantastic! But I agree, this is a very
disruptive (and overdue) technology. I for one welcome it!
The problem with realtors is that there are essentially no barriers to entry
(6-12 week course and a test makes you a realtor). This results in oversupply of
realtors so that they need the 6% commission to survive because those
commissions get spread out between a bajillion realtors to the point that very
few realtors make a good income. The RE industry needs to evolve and limit the
number of realtors so they can all survive on a more appropriate commission like
2%. (btw you're overpaying if you agree to 6% to sell your home, real easy
to find full service for 4-4.5% these days)
Great idea. I think two people could easily build a similar app, have fewer
employees and charge $75 up front and $299 at closing. I think I'll look
This is the free market at work. Innovation, alternatives, competition etc.
However, we are naive to think that this spells the end for Realtors. When
offerings like turbo tax or HR block came around, did it spell the end of your
corner CPA? Homie will help to "cull the herd". Don't lump all
realtors as the same. Many go above and beyond in their service and time while
others are content to simply list on a website and hang a sign. If anything,
Homie will push realtors to be creative and expand their services. In the end,
we the consumer wins. More options and more value. It is laughable that people
complain about the commission when they are content to pay 40%+ markup on
consumer goods like furniture, electronics, and food. I have had the privilege
of working with many different realtors in my career. Not all have provided
commiserate value, Because of that I didn't use them again. Others went
above and beyond in their efforts and work. I was happy to pay them for their
Wonderful idea. I will use Homie on my next home sale.
Remember when we heard that robots were going to take away our cushy jobs?It's your turn, realtors.
I've bought and sold many homes without an agent. Some transactions went
just fine, no hiccups. Others had more complexity. I would have loved something
like Homie then. To have an actual real estate attorney help with the
negotiations, the paperwork and the occasional title company or appraisal
surprise would have made it all so much easier. I love this model. Get the help
you need, and pay a reasonable flat fee. Love it!
I have long thought that this was an industry ripe for disruption. Once the
ability to control access to MLS was gone, agents had little to offer. I have
some good friends in that industry and I feel for them personally but this is
inevitable. Unfortunately, it sounds like it will result in another arrogant
tech multi-millionaire in the Valley.
YES!!!! This will be the end to the ridiculous 6% commission. That might have
been reasonable when houses were selling for $25,000 decades ago. But just like
was mentioned NO realtor is working hard enough to make $24,000 in commissions
when the $400,000 sells in 3 days. The real estate industry is
already reeling from this one. Homie grows by the day. I've checked their
site each week and it seems like the listings are growing exponentially.I love the never ending realtor line of "the contracts are scary.
You can get way off track." It is a total lie. I sold my last house FSBO
and sold it for $10,000 more than the realtor wanted me to list it for. It sold
in 2 weeks. It was so easy. I found the buyer. They got the loan. We went to
the title company who took care of ALL the paper work. I walked out with my
check and didn't pay any commission to any realtor. Don't
live in fear. I have no connection with Homie but I like what they are doing.
It is going to change the industry. It already is.
Thank you! If there was ever an industry that needed disruption by technology,
it's home sales. 6% commission is ridiculous.
Bruce1, I'm curious...what do you do for a living?
What a great idea!The real estate agent commissions are one of the
biggest scams in the country, and it is about time the free market comes up with
an alternate process. People can still use realtors if they want to, but they
are not forced to by what has been a monopoly.Now, if we can just
keep government's fingers out of this so they don't mess it up!
The Realtors make way too much. Good on Homie, hope it takes off.