Real estate technology startup Reesio is nothing if not ambitious. The San Francisco-based firm just raised an additional $1.096 million in seed funding, and plans to use it to tackle an issue that has been the bane of real estate data aggregators everywhere: listings accuracy.
But the firm plans to do it in its own unique way, by leveraging the very data entered by its agent customers into its transaction management platform. By capturing exactly when a deal reaches the next step in the transaction process, Reesio hopes to create the most accurate residential real estate database out there.
Wheelbarrow filled with cash image via Shutterstock.
The idea for the move came as the company’s team was about halfway through the 500 Startups business accelerator program it participated in this spring.
“We started looking closely at the actual transactions themselves that were being created by agents in our system, and we realized that we were collecting this massive amount of listing and property data in real time as it was progressing throughout the course of a transaction,” said Reesio co-founder and CEO Mark Thomas in a statement.
“We then started comparing this transactional data to the big search portals like Zillow, Trulia and realtor.com, and we were blown away at how inaccurate those search portals were compared to what was actually happening in real time within Reesio,” Thomas said. “There are some industry studies that state that 36 percent of the listings on the large search portals are inaccurate. We were finding it to be closer to 50 percent when we compared our transactions to those on the search portals.”
Real estate portals Zillow and Trulia rely on a mix of sources, including MLSs, brokers and agents. But even realtor.com, who due to its agreement with the National Association of Realtors, receives direct listing feeds from virtually every MLS across the country, has inaccurate data, Thomas said. This is because realtor.com — whose data is widely touted as the most accurate among the major listing portals — relies on MLSs, and MLSs rely on agents.
“Because this process requires the listing agent to manually create the listing in their local MLS system and manually update it every time there is a change in the transaction, a lot of the data is significantly delayed in terms of when it’s actually updated in the MLS. Or worse, the data is never updated in the MLS at all,” the company said.
And because MLSs feed to so many other websites, including agent and broker websites as well as third-party portals, “if it’s not accurate in the MLS, it’s not going to be accurate anywhere else,” Thomas told Inman News.
As of Oct. 29, Reesio will offer agents and brokers its transaction management platform for free and throw in a host of new features not currently available through its competitors. If the platform is free and feature-rich, the company reasons, more agents will want to use it and keep using it, all the way through the end of a deal, giving Reesio the pristine listing data it craves.
“The beauty of our system is that agents just need to do their job as they already are doing it in our system, and we update everything automatically for them. No more having to go and manually update the MLS or any other search portal,” Thomas said. “This means that the listing data in Reesio’s system is more accurate than even what’s currently in the MLS, because it’s being updated in real time as things progress throughout a transaction.”
For instance, Reesio knows precisely when a property is listed for sale or goes into contract because the documents associated with those events are signed right on the Reesio platform — even if the listing is a “pocket listing” that may not make it into the MLS or third-party search portals.
“That’s why the opportunity here is so big and we feel this is a real game-changer. No other place is getting this kind of accurate real-time data like we are, not even the MLSs, and if the MLSs aren’t getting it, then the portals certainly aren’t,” Thomas said.
When the latest round of funding — from Digital Garage, MicroVentures, Hiten Shah and several other angel investors — is added to the $205,000 previously raised, Reesio has just over $1.3 million, which it plans to use to scale its user base. The firm now has about 1,500 agents using its platform.
“Our goal in the next 18 months is to get between 700,000 and 1 million properties in our system for 15-20 percent market penetration,” Thomas said.
Thomas hopes MLSs will see Reesio as a potential partner MLS, rather than a threat. He envisions MLSs encouraging their members to use Reesio to create their transactions and automatically importing the data from Reesio’s platform.
“Over the years the MLS has tried to become everything unto everybody,” he said. “The MLSs do real estate things very well, but I don’t think technology is their strong suit. They can partner with a company that does have top-shelf technology and work with them, not work against them.”
Reesio is also considering offering to syndicate its listing data to major portals Trulia and Zillow as a solution to their own accuracy woes. Some common errors Reesio has found on the most popular home search sites regard listing status, listing price, and other property details such as number of bedrooms and bathrooms and square footage.
“Buyers hate finding a property on Zillow and Trulia that they love, only to find out that it already went into contract two days earlier,” Thomas said. “Even worse is when the big search portals don’t even have a property listed as for sale, when in reality, it really is for sale. Buyers end up completely missing out on such properties, which is a major problem.”
Thomas said the company is still feeling out whether it will syndicate to MLSs or to listing portals and plans to start what it expects to be long conversations with both at the end of the month.
For now, Reesio doesn’t plan to roll out its own listing portal anytime soon. While Reesio could potentially outgun the big portals in terms of listing accuracy, the portals have put millions into building their brand power and have the traffic to show for it.
“I just don’t think it makes sense at this time to build out a consumer search portal,” Thomas said. “I think it’s a long play or a long process.” It’s not out of the question, ”but that’s not the strategy at all at this point,” he said.
What is the strategy? To become a “one-stop shop” for real estate agents, Thomas said.
In addition to offering its transaction management platform for free on Oct. 29, Reesio will also roll out several new features. These include the ability to schedule showings with listing agents and to make offers on a property that listing agents can then easily accept, reject or counter.
Reesio will also launch public listing pages that will be automatically generated when a listing agent creates a transaction on the Reesio platform. The pages will include listing details, an interactive map, and a play-by-play of listing activity in real time, noting, for instance, if the price or status has changed or if contingencies have been removed.
But the company will keep confidentiality in mind and will not violate privacy laws, Thomas said.
An agent could use a Reesio public listing page to market a property by posting a link to the page on his or her website and social networks. Agents could also post public listing page links to their MLS to inform buyer’s agents to submit all their offers through Reesio without having to invite the buyer’s agents into the transaction, Thomas said.
And here is where Reesio plans to make money. Because the public listing pages will give buyers and buyer’s agents a way to contact listing agents directly — to ask a question, schedule a showing or make an offer — without any competing buyer’s agent ads displayed, Reesio will charge listing agents for that lead generation.
“So the transaction management is 100 percent for free, but if they want the buyers and buyer’s agent leads they will have to pay,” Thomas said.
He expects listing agents will pay, at least partially because they will be more likely to be a “dual agent” — represent the buyer and seller on both sides of the deal.
Dual agency is a contentious issue in the real estate industry. Reesio has not taken a position on dual agency, but “I will say listing agents haven’t been served,” Thomas said, noting that the big portals have focused on selling advertising to buyer’s agents.
“Listing agents are already doing marketing like open houses. This is giving listing agents a way to control listings in a way they haven’t before,” said Reesio co-founder and domain expert Uyen Tran.
Ninety percent of the transactions currently created within Reesio are created by listing agents. The company does not yet have a price point for how much it will charge listing agents for lead generation. Thomas estimates the cost will be somewhere between $99 and $399 a month.
But just because transaction management will not directly line Reesio’s pockets anymore, that does not mean that the startup will shift its focus away from its transaction management product, Thomas said.
On the contrary, transaction management is both ”critical” to keep agents coming back and tied to Reesio’s overall goal of providing an end-to-end solution, he said.
Indeed, another new feature Reesio plans to launch at the end of the month is a complete revamp of its document section to give brokers more control to take specific actions on documents and check for document compliance. For example, brokers have asked to be able to literally approve each document and have asked for more document types, Thomas said.
And in about three months, Reesio plans to start showing aggregated data on comparable sold properties and offers on comparable properties on public listing pages to help buyers make more informed decisions. While the company hopes to have a substantial amount of data to populate these features in the next six to 12 months, the company won’t wait for that, Thomas said.
“Some data is better than none. As long as there’s one comparable to show you, we’ll show you,” he said.
When asked whether agents and brokers would be told how the data they enter into the Reesio platform will be used, Thomas said the company would be “very upfront and transparent” about that, not only including the information in its terms and conditions but also posting on its website.
“Ultimately, we feel these extra tools are helpful for the agent. At the end of the day, they should like it. That’s part of why agents try to opt out of the Zillows and Trulias of the world because they don’t like what they’re doing with their data,” Thomas said.
Reesio was founded in January 2012 as Reaslo Inc., a real estate tech company and licensed California brokerage that for a flat fee offered to help home sellers in California advertise their home in the local multiple listing service and provided tools to automate transaction paperwork and tasks normally handled by agents.
But shortly after the launch of its for-sale-by-owner platform in September 2012, the company changed its business model to focus exclusively on a platform for real estate agents and subsequently offered that platform nationwide. In April, Reesio rolled out a transaction management product to help brokers manage their agents’ transactions.
That same month, the company gave up its brokerage license since Reesio had not offered brokerage services since its FSBO days. And in June the company officially changed its name from Reaslo Inc. to Reesio Inc.
Thomas said Reesio’s plans do not represent a change to its business model, but rather an expansion of the company’s goal to have agents “do anything and everything” with Reesio.
“This is still using the core of our technology. We’re not changing anything; we’re adding to it. It’s definitely not a pivot. The No. 1 request from agents is ‘We want more features. We want end-to-end.’ This makes us more robust,” Thomas said.
The company also eventually plans to roll out a customer relationship management (CRM) system and may decide to expand its revenue stream by partnering with vendors, Thomas said.
“Buyers need homeowners insurance. Buyers need home inspections. Sellers need staging. We have already started to have conversations with vendors because we know exactly at the right moment when somebody needs something,” he said.
“We don’t need to nickel and dime agents on the transaction management piece. There’s just no reason to. There’s other ways we can make money,” he added.
Reesio currently has four employees and plans to use its newly acquired funding to hire two more engineers, including one focused on mobile.