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Tim Heyl’s big idea didn’t come from Wall Street. It came from his background as a real estate agent.
Before founding the real-estate startup Homeward, Heyl spent years gaining experience as one of Austin’s top agents. That perspective made one fact painfully clear, he said: The typical financed offer stands little to no chance against an all-cash alternative.
Instead of sitting on the idea, Heyl built a business around making these cash offers accessible to more buyers.
“I was frustrated that I was seeing all of the change happening, including innovation, but it was all happening from outsiders,” Heyl said.
But agents could play a larger role in real-estate innovation going forward, he said. Their insight and knowledge of the industry’s weak points is invaluable to investors.
“We don’t pretend that it’s all right and good, but we know where the problems are,” Heyl said of the perspective agents can bring.
The founder and CEO of Homeward’s comments came Wednesday during a conversation with Brad Inman at an industry event in Las Vegas.
Homeward’s concept is built around strengthening offers from typical buyers. Most buyers need a mortgage loan in order to secure a home, but relying on financing can put a buyer at a disadvantage. Homeward makes all-cash offers on behalf of buyers, then allows them to purchase the home back from the startup through a traditional mortgage.
The company also serves sellers who are looking to buy, offering a way for them to secure their new home before selling the old one.
Once Heyl founded the company in 2018, the money followed. Earlier this year, Homeward announced $371 million in new funding to help grow its business. Previous funding rounds had raised more than $100 million combined.
As real estate agents identify holes in the services offered in this ever-changing market, Heyl said he encourages them to think like an entrepreneur about possible solutions. There’s plenty of room for new startups in this space, he said.
“This is not a winner-take-all industry,” Heyl said. “There are too many niche issues to solve.”
One big issue on the horizon is home affordability, which could soon reach a crisis point in parts of the country, Heyl said. Solutions for buyers include a tech-fueled expansion of co-buying options, but other ideas could prove fruitful as well, he said.
“There’s going to be all kinds of solutions and options,” Heyl said. “And the cool thing is, real estate agents are going to be able to put their name on that.”