Since it costs about four times more to sell a home in the US (and Canada) than any other country, my definition of disruption in the residential real estate industry is any technology that dramatically lowers the cost of selling a home.
So, will any of these new real estate technology platforms disrupt anything, or will they be like most of the others? Just high-tech versions of the status quo.
The first entrant in this real-tech competition is Haus. If I had to boil it down to a single sentence I would describe Haus as a real-time offer notification platform. Rather than have the buyer’s agent fax or deliver an offer to purchase to the listing agent, they simply upload it to the Haus repository where everyone can see it and it can trigger notifications to interested party.
Disruption factor: Almost none. Haus is not much more than the next generation fax machine. I’m sorry to tell you, but unless you’re cutting out the middleman (i.e., the agents) or dramatically reducing their role (and associated fee), you’re aren’t disrupting anything.
The next entrant is iListProperties. Their claim to fame? “Being the ONLY TRUE A La Carte real estate company with a NO RISK model.” They are currently only available in NY City, Florida and Texas. What is iListProperties really? A portal for finding fee-for-service agents (sometime referred to as real estate consultants).
Disruption factor: Some. As home sellers become more comfortable with the available technology and home selling in general, they’ll start to migrate more toward the fee-for-service model, which does reduce the role of the middleman agents. The rub of course is that fee-for-service agents have been around for two decades. Will iListProperties increase their popularity? Only time will tell.
Our last entrant in disrupt-o-mania is DwellOwner. They claim “No Commission Full Service For Sale By Owner.” That’s a fancy way of saying they offer bundled FSBO services, which ostensibly includes some access to a local agent as an advisor. I’m sure the other local agents will be delighted that some of their own are assisting FSBOs.
Disruption factor: Some. It would be more but there are already a dozen companies doing this. But I do think this new “assisted FSBO” idea is quietly becoming the transitional model between the status quo and eliminating listing agents altogether. So yeah, I hope they succeed.
So, which one will be a big winner, if any? Hard to say. None of them is a truly unique business model and none of them is addressing the single biggest cost to home sellers today: having to pay for an agent that helps the buyer. The company that does that will forever transform the American real estate landscape. I’m still waiting.