As anyone who has been through the process can readily confirm, buying a home can be a stressful ordeal. Between finding an agent, finding a home, navigating a bidding war on a property, making an offer and getting the whole deal signed, sealed and delivered, it has been a decidedly analog and frustrating process.
It was the process of buying his first home that inspired HomeLight CEO and Founder Drew Uher to launch his firm and introduce technology into the market. He and his wife almost lost out on their dream home because their lender couldn’t close on time, he said, and the entire closing process itself was “a mess and a headache.”
“The problem that I started with was the agent matching problem. We basically started the business by helping buyers and sellers find the best agents in their area in a data-driven way, with a focus on agents that would sell their homes faster and for more money,” Uher said.
HomeLight was always conceived as a tech platform for the real estate market, a concept that was often called “harebrained” in the firm’s founding days of 2012, when having a tech startup in real estate seemed like an incongruent idea. But even as the digitization of the real estate market has since gotten a lot more traction, and as HomeLight has expanded its suite of digital tools, its goal isn’t to remove the real estate agent from the process, as other entrants in the space have attempted to do.
“If you’re buying or selling a home, we believe the best outcome involves hyper-local expertise — someone that knows every home on every street, the other agents in the market, all the service providers and so on,” Uher said. “This advice is really valuable, but so is understanding the negotiating dynamics, where one simple move can mean the difference between 5, 10, 15 or 20 percent of the home price, which dwarfs a couple of percentage points here and there for commissioning.”
Keeping Local Expertise
The goal of bringing high-tech tactics into real estate isn’t to replace the agent, as their specialized knowledge will always be an important part of the process. The goal is to augment the agents’ efforts with a suite of tools that enhances and improves the process for the buyer and seller by removing the traditional friction points that can slow down or even derail the process.
HomeLight’s Cash Offer product, for example, allows a consumer who needs a mortgage to still make a cash offer on a house, which makes their offer more competitive and increases their chances of securing a lower price. Using HomeLight’s technology and tools, the buyer can make sure the financing process is nailed down and that the funds are ready to go much faster than a traditional real estate process.
Meanwhile, HomeLight’s trade-in process eliminates the classic contingency where the buyer has to sell their current property before they can buy a new one, explained Uher. The trade-in option gives homebuyers a guaranteed place to sell without having to wait for a buyer of their own.
“We think it’s crazy that in 2021, there are still contingencies in real estate transactions,” Uher said. “Contingencies on getting a mortgage, on the appraisal, on selling another property — all of this creates uncertainty for the seller and massive friction in the process.”
And that friction can be minimized by tapping into connected technology and opening up consumers’ options when purchasing a home, said Uher. He predicted that those options will get increasingly important as 2021 rolls on and the real estate market continues to heat up. As of the time of this writing, inventory is tight and sellers are suffering from a bit of fatigue. The normal seasonality of the market has been disrupted as consumers have suddenly been prompted to closely reexamine the concept of home.
Another such reevaluation is poised to happen soon, as vaccines roll out and COVID-19 recedes into memory. As Uher noted, HomeLight is incredibly bullish on what will likely come next – including how it will continue to advance technology to turn a historically stressful process into one that consumers can honestly say is delightful.
“We’re bullish on the economy and job growth, which we think will help support a robust real estate market,” Uher said. “A year ago, in late March of 2020, I would have been a lot more muted and uncertain. But right now, we see nothing but tailwinds for the market.”