Searching listings online is the most common way to find a home, yet only a small fraction of consumers find their agents using the Internet. HomeLight, a referral site that matches agents with consumers based partly on MLS performance statistics, has been working to change that. And a recent funding round has ensured that the startup will be able to continue its crusade for some time to come.
- HomeLight matches agents with consumers based on MLS performance statistics, such as price range expertise, 'time to sell' and 'likelihood to close.'
- The agent-matching site $11 million in fresh funding will help the startup drive product development and expansion.
Searching listings online is the most common way to find a home, yet only a small fraction of consumers find their agents using the Internet.
HomeLight, a referral site that matches agents with consumers based partly on MLS performance statistics, has been working to change that. And a recent funding round has ensured that the startup will be able to continue its crusade for some time to come.
HomeLight has raised an additional $11 million in a Series A funding round, bringing the startup’s total funding to $15 million. Other companies aiming to match consumers agents based partly on transaction data include OpenHouse and UpNest.
The last year — during which HomeLight says it grew by 400 percent — has “served as further validation of our core thesis — that we have developed a smarter way to find a real estate agent,” said HomeLight CEO Drew Uher.
How do buyers find agents?
By far, the most common way homebuyers find their agent is through a friend, neighbor or relative, with four of 10 homebuyers falling into this camp, according to the National Association of Realtors (NAR).
By comparison, only one out of 10 homebuyers find their agents through the internet, even though using the internet is also the most common way they find homes.
Although consumers use data to make decisions about many daily activities, they are “completely blind” when it comes to buying or selling a home, instead often using “referrals from unqualified individuals,” said Oren Zeev of Zeev Ventures, which led HomeLight’s recent funding round, in a statement. (Oren Zeev has been appointed to HomeLight’s board of directors.)
But HomeLight has “created a new way for consumers to put the home transaction into the hands of the person that is most certified to support,” Zeev said.
Matching buyers, sellers and agents based on dozens of variables
Claiming the ability to evaluate millions of transactions closed by over two million agents, HomeLight matches homebuyers and sellers with agents based on dozens of variables, including home sales, price range expertise, “time to sell,” “likelihood to close” and history of responsiveness to referrals provided by HomeLight.
HomeLight told Inman in February 2015 that it typically earns a 25 percent referral fee from agents who close transactions with leads they receive from HomeLight.
Depending on the market, HomeLight either co-lists or co-represents a consumer with an agent or signs a referral agreement with the agent.
Agent privacy concerns
HomeLight has sparked pushback from at least two MLSs in the past for publishing agent transaction data, but no conflicts of this kind have come to light in several years.
The agent-matching service may have taken steps to offer more privacy to agents since officially launching in 2012 with $1.5 million in funding from Google Ventures and a handful of other investors.
HomeLight doesn’t appear to display as many agent performance statistics as it did in the past. For example, at one point HomeLight would show if an agent “finds bargain deals” but no longer appears to.
Homebuyers also must first enter their names and phone numbers for access to agent search results and profiles after completing a questionnaire designed to determine the best agent for them. Previously, HomeLight would show search results and profiles without requiring consumers to register.
HomeLight also factors agent reviews into its matching process, placing the most weight on those posted by former clients of partner agents. Agents can also pump up their rankings by quickly responding to referrals and closing them at high rates.
HomeLight’s appointment of Tom Tang (a former vice president of analytics at TrueCar) as its chief analytics officer and Sumant Sridharan (former president of CafePress) as its chief operating officer provides HomeLight with “the strategic guidance it needs to broaden and accelerate product development, while expanding efforts to reach homebuyers and sellers in markets across the country,” Uher said.
Other investors that participated in HomeLight’s recent funding round include Dovi Frances of SGVC, Bullpen Capital, Montage Ventures, Krillion Ventures, Innovation Endeavors, Oren Dobronsky and Yariv Davidovich.
Editor’s note: HomeLight is a former participant in the Inman Incubator program. Inman does not have an economic interest in the startup.