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A group of investors has bet big on the idea that homeowners might not always want the full-time help of a traditional agent by backing a Series A funding round of $10 million for HomeLister, an online homeselling resource.
The investors, M13 and Homebrew, are hoping the company’s announced growth plans for 2022 come to fruition. HomeLister is currently operating in 17 states.
HomeLister’s model better reflects the way consumers expect services, Lindsay McLean, CEO and co-founder of HomeLister, said in a statement about the funding.
“Like so many other parts of our economy, digital transformation can drive efficiency across many aspects of the home selling process without sacrificing quality,” McLean said. “Knowing that a home sale is one of the biggest financial transactions of a person’s life, our goal is to put power and control back in the hands of sellers by letting them select the level of support they need and saving them tens of thousands in the process.”
McLean is a software engineer and real estate developer. Her co-founder is attorney and real estate broker, Jennifer Stein.
The company’s model allows consumers to pick from packages or an al-a-carte selection of listing services, as they enter a property into the platform’s interface.
Homeselling packages start with the Basic $599 level and include placement on major portals and a seller’s local MLS, video showings, a yard sign, ShowingTime scheduling services and access to HomeLister’s mobile software to monitor activity. The company has mobile apps for both iOS and Android.
Marketing services and resources increase with each flat-fee tier of service, which are Premium and Platinum with the most expensive level at $2,999. Paying that amount gives sellers access to professional agent services for staging, negotiation, appraisal comps, general sale guidance and document preparation. Marketing benefits at Platinum include aerial photography and email marketing, in addition to photography, portal placement, more signage and a listing flier.
HomeListers’ customers save an average of $21,000, or 3.7 percent, per sale, according to company data. Fees are split between upfront payments and closing costs, based on the level of service purchased.
The company also stated that 45 percent of homes it has helped sell, do so at above list price and faster, reducing days on market from 16 to nine, on average. It has sold 3,150 homes, saving sellers more than $77.5 million since its founding in 2015, the company stated.
“This period of quick sales has clearly illustrated the inefficiency and cost implications of the traditional brokerage service: a model that is prime for disruption,” said M13 Partner Karl Alomar, in a statement. “HomeLister attacks this issue with a thoughtful and valuable digital solution that has great traction with sellers and significant breathing room for expansion and growth.”
HomeLister falls into a category of more affordable real estate services similar to For Sale By Owner, Clever, Houwzer and HomeLight. While each model differs in how it delivers services, they don’t leverage the traditional, commission-based models.
HomeLight, too, became more cash-rich as of late, with a $115 million financing punch in early June 2022, which included the acquisition Accept.inc, a cash offer provider, or “Power Buyer.”
The influx of cash into flat-fee and alternative sales models could suggest consumer sentiment is shifting, or at least looking in the direction of companies that do things differently, a possible byproduct of the current market’s two-year price swing.
Inman contributor Nicholas Acosta wrote flat-fee solutions are gaining momentum, but remain a small part of the overall market’s transaction volume.
“Given the logistical hurdles of selling a house without a Realtor — and the fact that only 7 percent of homesellers last year sold their house FSBO, per NAR’s 2021 ‘Profile of Home Buyers and Sellers’ — flat fee MLS listings will likely retain an important but minor role in the overall real estate industry,” Acosta said.