Homie making waves in housing market, tech company disrupts traditional real estate model

Posted 11/2/20

When Peoria resident Russell Schilt heard an ad on the radio for new real estate company Homie, offering to skip the commission fees in the process of buying a new home, it caught his ear.

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Homie making waves in housing market, tech company disrupts traditional real estate model

Posted

When Peoria resident Russell Schilt heard an ad on the radio for new real estate company Homie, offering to skip the commission fees in the process of buying a new home, it caught his ear.

After all, he now has two children and was is in the market for a bigger house.

He gave them a call, and within about six weeks of hearing that ad, he said he had bought a new home through Homie with the greatest of ease and saved about $9,000.

Mr. Schilt, 34, said the process of buying and selling his house through this relatively new company was easier than he thought. 

He said Homie resonated with him and he would recommend it a to a friend.

“We were on our second home. We loved it, but needed more space and a yard. We also love Peoria and wanted to stay. But both times, I feel like the Realtor didn’t have to work very hard,” he said. “When I heard about Homie, it looked easy and straight forward enough.”

Technologies like Utah-based Homie and iBuyer companies like Offerpad have become options for those in the market to buy or sell a home.

At Homie, homes are listed for a flat fee, rather than requiring a Realtor’s commission, which could save customers as much as $10,000 per transaction.

Nationally, Homie experienced a 525% growth in the number of transactions from 2018 to 2019. In 2020, the company says it is on pace to grow again by 50% year-over-year.

The company started in Salt Lake City four years ago and now has locations in Arizona, Idaho, Nevada and Colorado.

Homie General Manager Joshua Miller said the company is a full-service brokerage, and the office in this state has grown 220% year-over-year from a revenue standpoint since 2018, when the Arizona office opened.
In the Northwest Valley, Homie has closed about $28 million in home sales.

The company now has a mortgage, insurance and title branch.

About 18 months ago, the office had two agents and a lead. Today the office has more than 30 staffers and 10 Realtors who work with customers. He said 21 of the back-end staff are Realtors as well.

“We always have people on the back-end on our full service platform helping our clients. Customers will almost always talk with a Realtor, and once the listing is published, an agent will do a showing just like in a traditional brokerage,” Mr. Miller said. “We’re on a mission to make it easier for everyone to find and afford their dream home.”

A customer can go to the Homie website, provide details about the home he or she wants to buy or sell, such as number of bedrooms and bathrooms wanted, as well as desired square footage. Then a back-end team is notified that can provide answers to additional questions.

If the customer wants to proceed, he or she is connected with an agent and a flat fee of $2,500 is required to list the home on the MLS and market websites.

“One thing that is unique about Homie is that we also promote the home quite extensively on our own social channels, highlighting it on our Facebook and Instagram pages,” he said.

Additionally, Realtors working for the company can focus on clients rather than the marketing required for agents to be competitive, he said.

“It takes a lot of lift off the Realtor because of the marketing, so they have the best interest of the customer in mind,” Mr. Miller said.

Realtors are known to create relationships with clients, some over many decades and homes. It’s not uncommon for parents to refer their Realtor to their adult children when they are in the market to buy a home.

Realtor Rebecca Durfey said full-service agents bring an incredible value to the table, understand the market and the market trends, and are able to secure the most qualified buyers and negotiate the highest price for sellers. The relationship goes well beyond the transaction, she said.

Ms. Durfey has done several deals with agents from Homie and felt like she was working with a “for sale by owner” rather than an agent experienced and knowledgeable about the market.

In two instances, Homie agents had never met the sellers or entered the home at all, she said.

“This is a tough one because I am in favor of sellers making as much as possible, and I do not want anything I say to be misunderstood or misconstrued. I can only speak to my experience, of course. The [Homie] agents I have worked with were nice people, I am sure, and I have nothing against them personally. However, what I personally felt was that I ended up having to do a great deal of work for both sides of the transaction – my buyer’s side and Homie’s seller side,” she said. “The sellers I have talked to who have interviewed Homie agents have told me they have had to come up with price and terms because the Homie agents have told them that the seller knows their market better than they do, so they will rely on them.”

In real estate, as in most other industries, technology has been used to increase efficiency, remove friction and act as a differentiator.

Mark Stapp, a real estate professor at Arizona State University, said Homie is is another example of that. He said real estate resale is unlike any other business in that it is highly inefficient, mainly because of the unique nature of each property, transaction and buyer/seller.

New technologies and platforms can have pros and cons, he said.

“None of the platforms are changing real estate, but each is impacting in some way how the business is carried out,” Mr. Stapp said.

Philip Haldiman can be reached at 623-876-3697, phaldiman@newszap.com, or on Twitter @philiphaldiman.

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