Real estate has nearly always been based on direct (often multiple) interactions between buyers and sellers, though the industry continues to adapt well to the digital space, as PYMNTS recently noted.
However, real estate startup Homie is successfully subverting the traditional paradigm with a tweaked business model that deliberately and increasingly appeals to first-time home buyers who want to avoid the industry’s built-in expenses, such as the 6 percent real estate agent commission. Homie utilizes real estate agents, but incentivizes customers to hire them via a flat rate of $1,500 instead of the usual commission-based industry model.
Fresh off a new round of Series B equity funding that secured $23 million, the company intends to expand into three new markets this March, including in Las Vegas. Co-founder Johnny Hanna revealed that Homie had looked at Dallas for its next market expansion, but also has its sights set on Boise, Colorado Springs, Nashville and Seattle.
Homie claims that it has saved buyers more than $55 million in industry commissions, and has increased its revenue more than 150 percent in the last year.
“Buying or selling a home is expensive and time-consuming because of all the different companies you have to work with,” Hanna said. “Communication becomes a game of telephone because of all the parties involved. We are disrupting the traditional model, and saving customers thousands of dollars by combining technology, a team of experts and a one-stop shop for real estate. Technology has changed everything except the real estate business model. That time has finally come.”