More and more, venture capital-funded tech startups are offering homesellers a quick, all-cash, easy sale online — often without an agent. But what if any agent could walk into a listing presentation not only with a suggested list price, but with an investor offer in hand?
That’s what Huntington Beach, California-based real estate tech firm W&R Studios wants to make a reality. Within the next 30 days, the firm is launching a new feature integrated into its popular comparative market analysis software, Cloud CMA, that will allow agents to bring investor cash offers to prospective seller clients.
The feature, Cloud Investor Connect, will initially debut in specific ZIP codes covered by the California Regional MLS (CRMLS) in Southern California and include one investor buyer partner, but W&R Studios plans to expand the feature nationwide over time.
The agent has always been W&R Studios’ “true north,” company co-founder Greg Robertson told Inman in a phone interview. When the iBuyer movement first began, the company began to wonder: “How can we help our customers see more value or participate in this kind of market? How do we make agents look awesome in front of their clients?” he said.
“Wall Street and Silicon Valley have invested over a billion dollars in ‘iBuyers,’ with companies like Opendoor, Offerpad, and now Zillow taking the lead. We want to democratize this ‘iBuyer’ movement, by giving any Cloud CMA subscriber, any agent, the ability to generate cash offers for their clients,” Robertson added in a statement.
Cloud Investor Connect will be available to Cloud CMA subscribers at no additional cost. More than 400,000 agents use Cloud CMA across the country and the software publishes more than 260,000 CMAs monthly — a scale that Robertson believes will make participation in Cloud Investor Connect attractive to investors nationwide.
“A client that has asked their agent to create a Cloud CMA, that’s high intent … not lookie-loo territory,” he told Inman.
Here’s how Cloud Investor Connect would work, according to Robertson:
- The agent creates a Cloud CMA on a particular property and at the end of the process, if a property qualifies, a message will appear asking if the agent would like to connect to an investor interested in making a cash offer.
- If the agent chooses to request an offer, W&R Studios’ investor partner will receive relevant details about the property and then contact the agent directly to ask some questions and complete the offer. The investor partner would usually make an offer within 24 hours, though it will depend on the time of day the agent creates the CMA, Robertson said. Investors would never contact sellers directly, he added.
- Then the agent would present the offer along with the Cloud CMA to the seller. Sellers will be under no obligation to accept offers, according to Robertson.
“We think this is the future of listing presentations,” he said.
If the seller accepts the investor offer, the agent will represent the investor as a buyer’s agent, Robertson said. If the agent also wins the listing, would the agent become a dual agent? “Yup. For however long that lasts in this political environment,” he said.
He acknowledged that dual agency is controversial, but said he’s not part of the government and agents would have to follow relevant policies. “I’m just providing a feature,” he said.
Moreover, though sellers may not take the investor offer most of the time, the offer will help agents manage seller expectations, “which is exactly what every good agent does,” according to Robertson.
“Even if they don’t take the offer — Zillow says 9 times out of 10 they don’t take the offer — the agent is saying, ‘Here’s the bottom of what you could get and here’s the top.’ I think it makes the seller more comfortable. They get the full range of what they’re looking at. I think it’s going to help the agent frame the seller’s mind a lot better,” he said.
“For us, [Cloud Investor Connect] is a service that agents can offer their clients, it’s not just a lead generation thing,” he added.
Real estate tech firm Flip Wolf will be W&R Studios’ investor partner in Southern California. Flip Wolf uses a proprietary algorithm to analyze MLS listings for their flip potential and shares that information with a network of residential property investors that subscribe to its service, though investors will not be charged a subscription to participate in Cloud Investor Connect, according to Flip Wolf CEO Tony Diaz.
For the initial phase of this test with W&R Studios, Flip Wolf sister company InvestNotic will be the only investor making offers in Southern California, though Flip Wolf plans to eventually open the bidding up to other investors as needed, Diaz told Inman via email.
“The vetting and notifications process is done through FlipWolf, which is a technology platform. Once we get a notification that the agents are requesting an offer and FlipWolf confirms that the property fits the investor’s parameters, investors evaluate the property and make the best and highest offer to the agent,” Diaz said.
“Our goal is to use FlipWolf to get an idea of the type and volume of deals coming through to determine the amount of investors we will need to service the Cloud Investor Connect program.”
The types of properties that will qualify for a cash offer are residential properties that are in need of repairs or whose sellers are looking to sell as-is with a quick cash closing with little to no contingencies, Diaz said.
“FlipWolf provides an investor rating and track record so the agents are only dealing with reputable cash buyers,” he said.
“We only accept investors that have a track record of performance. We have over 100 investors that are handpicked based on purchase preferences, price point, and level of rehab. We are looking to vet more investors to expand our reach and to serve Cloud Investor Connect and other opportunities,” he added.
Robertson cautioned that Cloud Investor Connect will not function the same way in every market. “I think in every market we’re going to have different types of investors. It’s still early days. This one partner we have in Southern California will not dictate how the whole program is run on the back end,” Robertson said.
As part of Cloud Investor Connect, W&R Studios is releasing an API (application programming interface) for investors who want to participate in the program.
The API will send participating investors information such as the address and comps the agent has chosen to help investors evaluate properties quickly, according to Robertson. For investors not yet participating, the API will be available with sample data so that investors can take a look at what they would be getting if they sign up as a partner, he said.
“With the API I think we’re going to get some valid candidates to increase this to more markets around the country,” he said.
Robertson envisions eventually serving up a marketplace-like experience somewhat similar to Zillow Group’s Instant Offers before Zillow became an iBuyer itself earlier this year.
“I think it’ll be like Progressive Insurance – ‘Here are your five instant offers. Which ones do you want?'” Robertson said.
“‘Here’s a cash offer from Zillow, here’s a cash offer from Offerpad, here’s a cash offer from Opendoor’ … that’s not [in existence] today but I think that could be an incredible experience for the seller and the agent,” he added.
That vision could take a year or two to become a reality and Robertson admits he hasn’t talked to any of the “big guys” in the market yet — Zillow, Opendoor, Offerpad or Knock.
“I’m taking the tack of not contacting anybody, seeing what kind of interest we get from people,” he said.
He stressed that Cloud Investor Connect is a test.
“We think it’s a great idea, we think it’s a great feature, but agents could yawn about it or the process once we hand it off to investors could be too arduous. We don’t know,” he said.
Still, Robertson noted he and W&R Studios co-founder Dan Woolley have been in the CMA business since 1998. This is not their first rodeo.