- Home61, which runs on in-house transaction technology, tripled its agent count in 2016.
- The firm's new training program is modeled after the startup accelerator model and is doubling agents' success in its early stages.
- In return for high-quality leads and more, agents pay 50% of their commissions to Home61, a setup that highlights the broad spectrum of successful models that comprise the industry.
They say everyone in Miami is a real estate agent.
According to tech-led brokerage Home61 CEO Olivier Grinda, his firm is up against 62,000 agents in the Miami market, among them full- and part-timers.
So when Grinda entered this highly saturated arena in 2014, leaving his other business endeavors behind, he fueled his underdog upstart brokerage with an entrepreneurial approach: differentiation, proprietary technology and a slick website: Home61.com.
Home61, Grinda’s brainchild that launched its first year of official business in 2015, was ultimately founded by a group of five tech entrepreneurs with diverse backgrounds.
Armed with $1M in venture capital from accelerator 500 Startups, German Ventures and three angel investors, they set out to eliminate the inefficiencies in the real estate market with their agent and consumer platform, and invested and built the technology to automate the transaction — from e-signature enabled contracts to automatic escrow and scheduling.
The company’s startup feel is further extended into its new agent training program, the format of which Home61 likens to a tech accelerator.
And for this, and access to quality leads, agents pay 50 percent of their commission to the firm, putting Home61 on one extreme end of the split spectrum, opposite of the also-flourishing 100 percent commission models.
Indeed, Home61 tripled its number of agents from 10 to 30 in 2016, and as of this year currently serves 40 agents total with an 80 percent retention rate after 12 months.
End-to-end transaction platform
With 30 agents, $45 million in sales and 429 deals closed last year (about 25 percent real estate and 75 percent rental), Home61 experienced 187 percent year-over-year transaction growth in 2016.
Equipped with search engine optimization and Facebook ad resources, Home61’s agents receive quality leads — pre-qualified buyers, sellers or renters. On the consumer side, buyers can go to brokerage’s site and select a property, and the algorithm immediately matches them with the Home61 agent best suited to their needs.
The system schedules viewings in minutes, makes offers and tracks deals digitally in one place with transparency between agent and client from beginning to end.
It also has a rating and comment system where clients can share feedback.
While Home61’s tech handles the bulk of administrative nightmares, agents are more free to focus on the client, said Grinda. On average, in their first year, Home61 agents do 17 transactions (including rentals).
The company generated over 1,200 leads for agents in April (more than 30 percent of were buyers and sellers; the rest were rentals).
Catering to rentals in the Miami market, a transient place with people who come to work for a stint before moving on, is big part of real estate there. For leases at Home61, the total commission can either be one month or 10 percent of a one-year lease, and in both cases the total is split between the listing agent and buyer’s agent.
Training program draws on accelerator model
In addition, Home61’s accelerator program, launched within the last month, gives agents access to mentors, educational resources and hands-on coaching and career development to help its agents build more sustainable, profitable careers.
“New ways of training novice real estate agents to position them for success are in demand in this industry and we think that we have a validated approach for positive disruptive change,” said Grinda.
Home61 said it is applying the Silicon Valley startup accelerator model to “fuel success” by combining its patented algorithm with an intensive hands-on learning program focused on how to seal deals, navigate escrow and leverage technology to streamline workflow.
Around 70 percent of the course trains agents on tech; 20 percent is focused sales and 10 percent on contract and legal.
“Ninety-nine out of 100 startups fail and the odds aren’t much better for real estate agents, with an estimated 85 to 95 percent of licensed agents quitting before their careers ever truly launch,” said Grinda.
“The tech industry has found a way to exponentially increase success with accelerators like Y Combinator, TechStars, and AngelPad giving way to Airbnb, Reddit, and Dropbox, just to name a few.”
Grinda noted that an emphasis on tailored small-group training, shadowing successful agents and access to top performing mentors could keep licensed agents in the profession.
Of the three cohorts (15 participants total) in the agent accelerator program, Home61’s data shows twice as many deals closed within the first two months compared to non-participants.
Three agents are being added to the program every week. The accelerator course includes five days of classroom instruction by experienced Gold Coast professor Ray Clemente, training on Home61’s platform, lectures, situational training, group activities and individual projects.
Agents then move into the field for 30 days of shadowing, coaching and development by superstar agents and C-level executives.
Tech entrepreneur as teacher
Peter Abrams, a tech entrepreneur who has worked on startups in Silicon Valley and Puerto Rico, is leading the agent accelerator program as chief talent officer at Home61.
He likes the tech industry accelerator analogy. “It’s a great way to bring the idea of a startup accelerator as you see in New York, or in Silicon Valley and bring it to real estate agents,” he said. “If you think about the startups in the Bay Area, what differentiates a very successful startup like Reddit, Twitch or Instacart from a company nobody knows about? An accelerator.”
While the technology at Home61 eliminates headaches, it’s only as effective as the user. So agents have to be properly trained on its workings — specifically, how to use the website and understanding perspectives of both the agent and client — as well as how to interact with clients and close deals.
“A lot of real estate companies have their own training, a guy in a classroom and everyone falls asleep,” Abrams said, adding that good training is all about situational practice.
Abrams, who had dyslexia as a child, worked with a lot of tutors growing up, and learned the tenets of effective teaching.
“If you don’t engage your student, they are going to forget what they are learning,” he said.
Abrams finds newly licensed agents have a lot of high hopes, but they are stressed about where to find clients and what to do with them — and the license itself doesn’t provide that guidance.
Home61 has consulted with its most successful agents to help design the accelerator, and one of its top agents, Carlos Gauch, is someone who Abrams calls a “closing machine.”
Gauch did 52 transactions last year — around 30 percent were residential sales — the rest, leases.
Gauch said one of his strengths is being persistent with agents on the other side of the transaction, contacting them in a number of ways until they respond when he has an offer.
What’s next for Home61
The intent behind Home61’s agent accelerator program goes beyond the immediate results to helping further Home61’s footprint long term.
Grinda describes the company’s goal as “aiming for positive disruptive change” by boosting agent development and streamlining the transaction with technology. He has his eye on other markets, but before expansion can take place, the founders want to have their new agents master the company platform.
Home61 is on track to add more than 100 agents in the South Florida market in the next 12 months, while the company looks to grow the quarter of transactions attributed to residential sales.
Once he is happy with the Miami operation, Grinda has his sights set on the similarly robust markets of Chicago and Phoenix.
Editor’s note: This story has been updated.