A company that is infamous for providing insights into the value of automobiles is about to test out its ability to provide values for homes nationwide, generating homeseller leads in the process and collecting subscription fees from agents who want those leads.
Kelley Blue Book has expanded a trial of what it calls Kelley Blue Book Homes, an effort to generate homeseller leads for agents. The program will launch in 10 states starting Aug. 1 before phasing up to nationwide presence early next year, the company told Inman.
The launch sets up a potential competitor for existing paid lead programs and valuation models, including Zillow and Realtor.com, an effort that will lean on Kelley Blue Book’s credibility and recent real estate tech that is powering the new effort.
“We have the best valuation software on the market,” said John Liss, CEO of TrueFootage, an appraisal company that is driving the KBB Homes expansion. “We need to get this in the hands of consumers, because the options that consumers have are terrible.”
In its current form, homeowners provide and affirm details about the home, including picking photos that better reflect the condition of various rooms inside the house.
After about a day, KBB sends a report that includes estimated low- and high-end ranges of the home’s value and suggests a local real estate agent to speak with. The company calls the suggested agent its Kelley Blue Book Homes Agent.
Agents will pay a fee based on how much of a ZIP code they want to “own,” or how many of the incoming seller leads they want to capture from the submarket.
“Agents pay us a subscription. So it’s a [share-of-voice] model where they can essentially have 25 percent of a ZIP code, 50 percent of a ZIP code, or own their entire ZIP code,” Liss said. “They’re the registered advisor in that ZIP code.”
That’s a contrast to the pay-at-close success fee models that exist, including Zillow’s model that takes up to 40 percent of an agent’s commission for closed leads.
“Agents are just sick and tired of that model. It’s extractive. 40 percent is a lot,” Liss said. “For high-performing agents, it’s giving up too much for the work that the agents are doing.”
The appraisal relies on TrueFootage technology and is apparently aided at least in part by a licensed real estate sales agent and sent to the homeowner via PDF. One Utah sales agent who provided a valuation report for KBB Homes declined to comment.
That agent’s PDF notes that the estimate is a broker price opinion, rather than an opinion of value created by a licensed appraiser under the Uniform Standards of Professional Appraisal Practice.
“We ingest the consumer reported information, we then run the report through TrueTracts, which is a proprietary valuation software built by TrueFootage,” Liss said. “That is quality-controlled. And then that is sent back to the consumer. And eventually it will be within minutes. Right now it’s not because we’re in kind of early days.”
In April, True Footage announced that it had raised $40 million to fuel its next stage of growth to scale.
In announcing that fundraising round, True Footage said that the investment would support wider residential valuations “across well-known consumer brands,” and that those brands would be announced at a future date.
Among the investors was Cox Enterprises, the parent company that owns Kelley Blue Book.
