Reali, a California-based, flat-fee tech-powered brokerage, wants to give its clients a leg up on other homebuyers with a new predictive tool that estimates the probability of placing a winning bid on a home.
“Our [artificial intelligence] team designed the tool after hearing from dozens of homebuyers in competitive markets who placed multiple offers without success,” Amit Haller, the founder and CEO of Reali told Inman. “Buyers can use the PricePredictor data to help predict the selling price on a home. Because it offers up probabilities of winning a home at various offers, you know what your offer should be to win that home.”
The machine-learning based model accounts for more than 200 attributes of a home pulled from a number of sources, including the multiple listing service, historical data and human insight from Reali. It will continuously update its models and get smarter over time as more consumers use it.
Buyers can input a range of bids through the tool and are given an estimate of the likelihood that the offer will be the winning bid before they even make the final offer. Reali, in a release, touts that the tool will be a boon to buyers in areas where homes regularly sell above list price.
In San Jose, recently a buyer purchased a home listed for $949,000, for $1.08 million after the tool gave the offer a 98 percent shot at success. While the purchase came in well above asking price, Reali says it was the PricePredictor that ensured the buyer made the winning bid.
“For the first time, buyers will have a tool that helps them determine what offer to make on a home,” Haller said. “It’s a tool that focuses on the transaction where traditionally, competitors’ tools have only focused on tools that estimate a home’s value.”
Coldwell Banker’s CBx Seller Leads, a franchise-developed lead software also offers a bit of a high-powered estimate tool, allowing for its brokers and their agents to see an estimated range for what a home will sell and also how many days it expects the home will sit on the market. Social network Nextdoor also offers home value estimates.
Reali’s, however, is consumer-facing, not simply for its employees.
The PricePredictor is the first tool to go live from Reali’s AI team and according to Haller, there are a number of different solutions currently in development.
“Reali is working on many AI tools for homebuyers and will soon introduce tools for sellers,” Haller said. “An example of a tool in our pipeline [is one that] will show buyers what features have the most impact on price, so you only pay a premium for things you care about.”
Haller said it’s too soon to decide on whether or not they would consider licensing the predictive tool to other brokerages or real estate portals and right now Reali is focused on just building tools for its clients.
“We will continue to build out tools for buyers and sellers,” Haller said. “Partnering with real estate portals isn’t out of the question, just not something we’re focused on right now.”
Reali, which launched in 2016 in Palo Alto, leverages an app and its flat-fee model, offering buyers 2.5 percent to 3 percent cash back at closing.
For buyers and sellers of homes under $250,000, the company charges a $950 flat fee instead of any commission. That fee rises to $4,950 for homes between $250,000 and $750,000; and $9,950 for homes priced over $750,000.
Reali operates in three California markets now, and it raised $20 million from investors in July, with an eye on expanding to 10 states by the end of 2019.
The PricePredictor is now live in the San Francisco Bay Area, Sacramento and San Diego. Reali said it will roll out to serve additional markets as the brokerage expands.