Many real estate brokerages, agents and marketers have been trying to crack the millennial nut. What do they want in a home? What are their preferred forms of communication? What incentives catch their attention?
Who better to answer these questions than another millennial?
That thought — along with a less-than-satisfactory homebuying experience — is what spurred Stephen Lane to create FlyHomes, an online discount real estate brokerage that seeks to put millennials in the homebuying pilot’s seat while offering the unique incentive of frequent flyer miles.
Dollars for miles
A couple years ago, Lane was in the process of finding a new home for him and his wife, and he struggled to find a real estate agent who understood and respected his communication preferences.
“We are the segment of people who would rather go to Amazon.com to buy a TV, rather than have a salesperson at Best Buy sell you on that TV,” Lane says. “We prefer to be in front of a screen rather than be face-to-face to communicate.”
FlyHomes allows buyers to get that Amazon.com experience by letting them choose how involved the FlyHomes team is during the buying process.
To begin, buyers must create a profile on FlyHomes’ website so they can search for and compare a number of homes they’re interested in.
From there, they are assigned a FlyHomes real estate agent to help them through online, video or in-person chats. Buyers have the option to have their agent walk them through the entire process, or only call upon them to handle negotiations and filling out paperwork.
FlyHomes Introduction from FlyHomes on Vimeo.
In addition to the customized user experience, buyers receive frequent flyer miles from Alaska Airlines, which can be used for flights on American Airlines, British Airways, Delta, AirFrance, etc., that are equivalent to the home purchase price ($500K equals 500,000 miles).
FlyHomes takes a portion of its commission from home sales and buys airline miles, which are released into client accounts 10 days after closing.
Lane says he took this approach to differentiate his platform from other real estate startups that offer discounts in the form of cash back as a way to draw in potential buyers.
His team surveyed a number of top brokerages and homebuyers, and what they heard “over and over again” was that clients chose agents based on discounts, which created no loyalty to the agent and their broker.
“It becomes more about who will give them the biggest discount,” Lane says. “It undermines some of the trust and credibility people have with real estate agents.”
Lane says the partnership with Alaska Airlines, an established Fortune 500 company, gives FlyHomes the credibility and trust essential to building a startup.
Furthermore, it creates loyalty to both brands — without playing the “who can give the biggest discount” game.
“It’s not about getting $5,000 back — people are spending their life savings for one of the biggest purchases in their lifetime, and what we’re giving back is the ability to keep taking trips, or to take the honeymoon of your dreams,” Lane says. “And the people who are attracted to it, are not people out there trying to get a discount. These are your everyday millennial buyers who want a cool incentive in addition to buying a house.”
Salaried agents with built-in clients
Lane says the differences don’t stop there. His team of experienced real estate agents and grads from some of the nation’s top universities are salaried, which Lane says helps those experts focus their energy on making the homebuying process smoother rather than scrounging around for clients.
Also, FlyHomes hires licensed real estate agents to open homes for tours, and even guide the buyer through the home if they choose.
Lane says this group of agents are composed of those who aren’t doing as much business as they thought and would like to participate in the homebuying process without the other stresses.
These tour guides are paid $20 an hour, which Lane says is competitive with the average salary of real estate agents in Seattle, the market FlyHomes’ alpha launched in.
Although FlyHomes has been around for less than a year, Lane believes he has a winning formula that millennial buyers will come back to again and again. The brokerage has expanded to Boston, and will hit Silicon Valley in early June.
