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The first time my husband and I made an offer on a home in the spring of 2018, we agonized over it for days. The house itself was tiny – a two-bedroom, one bathroom, 1,000 square foot little postage stamp of an abode – but the yard was big by San Francisco Bay Area standards and we saw potential.

The home was listed for $699,000. We made our offer: more than $200,000 over the asking price. (You read that right. And yes, it is totally crazy. And totally common where we live.)

We crafted the perfect letter to the kind widower selling his lifetime home (a practice that’s now discouraged because it can lead to discrimination). We detailed our love of the wildly-un-landscaped yard—more than five times the size of the compact house. We also raved about the proximity to the hills and trails where I spend most of my free time. My teenage daughter wrote a note to him as well — about the books she planned to read under the giant redwood tree shading the lawn and how excited she was to graduate from the same school his daughter had gone to a few years before. 

We thought we had it in the bag.

We weren’t even close. That house went to someone who made an all-cash offer for $1.1 million.

Cash is (still) king

All-cash offers, with short closing times and no contingencies, used to be a rarity, except in places like Manhattan and San Francisco, where there’s been more demand than supply for homes for years. But during the pandemic, with some 40% fewer homes on the market than last year, the all-cash offer is becoming increasingly common – and a crop of new technology companies are ready to lend a hand – and a giant wad of money too.

“We made four offers and they were all turned down. Then we went through Homie Cash and our offer got accepted right away,” 25-year old Melissa George recounts over the phone. Melissa and her husband Ryan recently sold a home in Boise, Idaho. At the same time, they were looking for a new home closer to family in Salem, Utah. “We wouldn’t have gotten this house without (Homie). Our offer wasn’t even the highest one, but the seller said they went with us because it was cash,” Ryan George chimes in.

The George’s also used Homie to sell their Boise house. “When we looked into it, we saw that we could save (several thousand dollars), so we said, ‘let’s just do it,’” Ryan explains. “We sold one house with Homie, then bought another with Homie and that saved us another $2,500 (on the buyers-agent commission). Ryan shopped for loans and Homie had the best rate we could find on that, too,” Melissa says.

Rather than charge a 3% commission to sell your home, Homie charges a flat fee of $3,500. That includes most traditional costs incurred with selling a home, such as listing, advertising, and photography. You still pay the buyer’s agent commission, which is usually another 3%. Still, on a $500,000 home, Homie’s flat fee can save a seller $11,500 and even more if you’re able to negotiate a lower commission with the buyer’s agent or a Homie-represented buyer purchases your property.

The Georges note that a few realtors they interviewed before choosing Homie warned them they wouldn’t get the same level of service, but that wasn’t the case. “It was actually better than when we bought our first home a few years ago,” Melissa says.

Melissa and Ryan George in front of their new house in Salem, Utah.

New tech promises to fix housing hurdles

Homie is one of several new home buying and selling platforms shaking up the legacy real estate industry. In addition to giving people a way to make more competitive all-cash offers and charging a flat fee versus a percentage commission, Homie also handles loans, titles, and insurance, all under one virtual roof.

“By streamlining this entire process, we can save people thousands in fees, commissions, and heartache,” Johnny Hanna, co-founder, and CEO of Homie says over a video call. “We can make homeownership easier, more affordable, and more accessible for all. We’re changing the way homes are bought and sold.”

Homie CEO Johnny Hanna says that while Redfin and Zillow revolutionized finding homes, much of the rest of the buying process has remained the same tangled mess. “By streamlining this entire process, we can save people thousands in fees, commissions and heartache,” he says.

Hanna says the average savings using Homie is around $10,000, though that number can change dramatically depending on the price of the home. Homie Cash is available in Arizona, Colorado, Idaho, Nevada, and Utah with plans to roll them out to more states. In addition to offering its real estate services throughout Utah, the company has agents in the Boise, Denver, Las Vegas, and Phoenix markets.

Zillow and Redfin transformed the ability for buyers to find homes,” adds Tyler Baldwin, CEO of Reali. “But what happens after someone finds a home (on Zillow or Redfin) is like getting into a time machine and going back 30 years. It’s the same disjointed, expensive process and you have to deal with 10 different entities or companies, everyone wants a piece of the pie and it drives the cost up another 10%.”

Reali’s real estate services are only available in a handful of major markets in California right now, though its loan services available in several other states/

Like Homie, Reali uses a hybrid mix of experienced agents and licensed brokers in the field, alongside new technology and service-bundling “to solve real consumer pain points,” Baldwin explains. “Our target customer is a second homeowner, who’s trying to sell and buy at the same time. There’s a lot of friction in that, double-mortgages, double headaches and 50% of home buyers cry at least once in the process. We want to fix that.” (Confession: When I went through the process myself, I was a crier and not in a happy-tears-of-joy sort of way.)

Reali’s real estate services are only available in a handful of major markets in California right now, though according to its website, its loan services are available in Arizona Colorado, Florida, Georgia, Illinois, Michigan, Oregon, Pennsylvania, Texas, Virginia, and Washington.

Both Reali and Homie say they hope to expand to more locations soon.

"Our target customer is a second homeowner, who’s trying to sell and buy at the same time," says Reali CEO Tyler Baldwin. "There’s a lot of friction in that, double-mortgages, double headaches and 50% of home buyers cry at least once in the process. We want to fix that.”

Prime time for a tech upgrade?

Customer-first, tech-driven companies like Homie and Reali could point to a major shift in the real estate industry similar to the impact of Airbnb on hospitality or Uber on ride-sharing.

“It couldn’t come at a better time,” Dan Weisman, the director of emerging technology for the National Association of Realtors (NAR), says over the phone. “The market is just crazy right now, it’s very competitive and there are a number of new products out there helping improve the process, create transparency and support the American dream of homeownership.”

Weisman also explains that NAR has its own accelerator and venture firm working on similar start-ups. NAR’s REACH scale-up program – run by NAR’s wholly-owned subsidiary/venture arm Second Century Ventures – has backed such companies as Knock, which is similar to Reali, Updater, which helps people streamline the moving process, and Plunk, a site that helps grow home equity.

“The biggest thing with any of these new platforms that are coming out is to truly understand what their goal is,” he adds. “What problem are they trying to solve? And how are they doing that to create more transparency and efficiencies across the industry? There’s a lot of technology out there and I would just warn people to do their homework and understand exactly what’s going on. Hopefully, new technology can help get you through the process, but like anything in life, they are always hiccups, right?”

More home-buying hiccups

When my husband and I finally did buy our first house, nearly a full year after making that first offer, we had lost three other homes to all-cash offers. We were also smacked with a severe case of sticker shock.

Tens of thousands of dollars in additional fees – like commissions, one-time charges, mortgage and title costs – kept popping up. Our real estate agent warned us about a few of them, but others caught us off guard too. By the time the dust settled, we had shelled out more than 10% – on top of the price of our home – on surprising surcharges.

Homie currently works with buyers and sellers in the Southwestern U.S. but hopes to expand eastward soon.

It was one of the most stressful experiences I’ve ever been through and not at all what I dreamed of all those years, squirreling money away for a place of our own. Hopefully, new tech tools can usher in a new era for homeownership that many people say is long overdue.

“That’s the broken part, the worst part of the whole thing,” Homie’s Johnny Hanna reiterates. “It’s not good enough anymore to say, ‘That’s just the way real estate works.’ It’s an antiquated, broken system. There’s no negotiation (on agent commissions) misrepresentation, a lack of transparency and (agent’s) incentives might not align with what you’re trying to accomplish. That’s when buying a home becomes more of a nightmare than the American dream,” Hanna adds.