Think that proptech will replace the services of a traditional real estate agent? Think again, says the founder of residential proptech company HomeLight, which continues to grow and provide more services that it says supports agents’ efforts.
In August, the San Francisco-based home-buying real estate technology platform acquired Disclosures.io, a provider of listings management technology that allows agents and brokerages to securely share property information, monitor buyer interest and manage offers, all in one place. With the acquisition, HomeLight is launching Home-Light Listing Management, a service that will be available to agents nationwide when it is fully integrated.. More than 100,000 agents already rely on the platform.
“HomeLight is building an end-to-end, comprehensive platform that helps buyers and sellers transact their property,” said Drew Uher, founder and CEO of HomeLight. “We started out as an agent matching platform, but over the last two years, we’ve put all of the puzzle pieces in place to create that experience, one that is agent-centric.”
Agents, he noted, have become increasingly concerned that tech will replace them.
“The answer is — emphatically — no,” Uher said. “HomeLight can provide you the tools, technology and financial innovation that will allow you to, in turn, provide those tools to your clients to provide a breakthrough experience, one that is substantially better. Disclosures. io is one more piece in that puzzle.”
HomeLight arose from Uher’s frustration in buying his own home 10 years ago. The company was founded in 2012 to help homebuyers find the right local real estate agent for them and their market, using advanced algorithm platforms. (Google Ventures was an early investor.)
Over time, the company diversified into financing. Services include Homelight Home Loans, which allows buyers in Arizona, California, Colorado, Florida, Oregon, Pennsylvania, Tennessee, Texas and Washington to apply online in 30 minutes; HomeLight Cash Close, in which the company will buy the home in cash, allowing buyers who need to sell their original home to purchasing the next, or underwrite first-time buyers who need to make a full-cash offer; HomeLight Simple Sale, in which the company matches sellers with potential buyers, skipping the listing and repair process, and title and escrow through HomeLight Closing Services.
In time, Disclosures.io will be rebranded as HomeLight Listing Management. It will allow agents to bring listings to market, including by sharing property information, making it easy for buyers to learn about a listing by creating professional property information packages in one secure online location; monitoring buyer interest by allowing agents to share the interest level of each buyer party with the seller via Buyer Interest Reports and organizing offers into an easy-to-read dashboard the compares terms side-by-side, providing sellers a comprehensive view of each offer on the table.
“There are many other things that happen during the listing process, including the prep of the home for sale — hiring painters, roofers, repair people — the marketing of the property, the staging, the showings, especially during COVID-19,” Uher continued. “There are many things we’ll be able to help deliver that end-toend solution.”
Disclosures.io has an 80% market share in Northern California, he related, and has become the de facto standard for managing property information. Unlike most of the U.S., where disclosures don’t begin until after the property is in contract, Northern California requires all of the typical disclosures about repairs ahead of time, allowing buyers to assess the real value.
“The situation where you get into contract and then get all this information and you whittle down the price is bad for everyone,” he said. “Sometimes we get a little smug in San Francisco, but I genuinely believe it’s a better way to transact real estate. There’s no reason to give the buyer the information up front. And Disclosures built their platform around that.”
Agents can monitor who is reading these packages and determine which potential buyers are genuinely serious or just browsing. Buyers aren’t going to spend hours looking through the disclosures if they’re not interested. If an offer comes in, agents can approach other potential buyers who are interested to see if they want to place a competitive bid. The result, Uher noted, is that agents in Northern California and HomeLight have been greatly impressed with the Disclosures.io platform.
“When we founded the company, our goal was to use technology to improve the transaction process — whether to help an agent market a listing, all the way to managing and presenting multiple offers to clients,” said Adam Gothelf, co-founder and CEO of Disclosures.io, in the announcement. Getholf and his team will remain with HomeLight Listing Management. “We’re proud of the progress we’ve made so far. Together with HomeLight, we look forward to bringing the same innovative technology to agents nationwide.”
The transition and integration are proceeding apace, Uher said.
“It will be a while,” Uher acknowledged. “They have a great platform, and we have a great platform, so there’s going to be a lot of technical integration. Agents can use both platforms right now.”
Uher met Getholf two or three years ago, when Disclosures.io was just being formed. They recently reconnected late in 2019.
“They were looking for a strategic exit, and we were looking to fill this part of the process,” Uher said. “Everything just worked.”
Meanwhile, HomeLight continues to expand in a very different environment from the beginning of the year.
“It’s crazy what a difference a couple of months makes. I don’t think any proptech CEO could have predicted in March or April the current environment,” he said. “I’m impressed by the resilience of the U.S. housing market. I would say that it’s not just a rate story. People are rethinking what home means to them as a result of the pandemic. The ability to have flexibility around work is permanent.”
Even those who return to the office will want more flexible work, and that favors areas where people want to spend — such as the wine country, Lake Tahoe or San Diego for Californians — while still having access to jobs. The very pricey San Francisco market is struggling, but the surrounding areas are busy. While acknowledging that he is less familiar with all of the complexities of the New York City market, Uher remained confident in the city’s long-term future.
“It will come back,” Uher continued. “New York City is a great place to spend time. Once the pandemic is over, the access is unbelievable. But real estate prices in these areas are a function of two things: the access to what’s outside your door and the location near jobs. In that respect, there is going to be a permanent change. It will come back but not to 2018 levels for a few years.”
With plenty of capital raised in a funding round last year, HomeLight is continuing to look to the future. The most recent quarter has been its most profitable, Uher said.
“I couldn’t be happier with the way the Home-Light team has really persevered during these challenges to drive amazing results,” he said. “We continue to have great relationships with our investors. And we’re going to continue to build out tools to facilitate the frictionless transaction of the future, one that is simple, certain and satisfying.”