Real estate startup Homie plans to expand to more cities with $23 million in Series B funding
Homie has made an impression among younger, first-time home buyers in the Utah and Arizona markets for cutting out the traditional closing costs, 6% real estate commissions and arduous paperwork associated with traditional home sales. It now plans to explore opening up in three new markets and will begin a Vegas launch in March with a fresh infusion of $23 million in Series B equity financing.
While most real estate outfits now cater to customers online, Homie takes a different approach, employing real estate agents who will help them through the process but who don’t take a commission. Instead, sellers get a $1,500 flat fee and buyers and sellers are guaranteed built-in attorney assistance for the negotiation process.
The 6% traditional commission associated with the home-buying process has been around for decades. However, it has also come under fire from the Department of Justice, which recently disagreed with a motion from the National Association of Realtors to dismiss several civil lawsuits lobbied against the organization. The move hints that the U.S. government may see these fees as archaic and unjustified as well.
How do traditional agents feel about a proposed loss of commission? Those outside of Homie TechCrunch spoke to on anonymity have said it often takes more work with less pay to close a deal this way. However, that structure seems to resonate with Homie users. Through Homie, the company claims to have saved over $55 million in commissions, with a revenue growth of 150% over the past year. This bodes well for the company, if true.
The ability to expand is also a possibly good marker for the health of the company. Homie co-founder Johnny Hanna told TechCrunch previously he’d looked at the Vegas area, as well as Dallas for expansion.
A few other places we could see Homie pop up in the next year include Boise, Seattle, Colorado Springs and Nashville.
The other new news out of Homie this year is the addition of real estate adjacent services like Homie Loans, Homie Title and Homie Insurance, all of which serve to streamline the process for customers.
“Buying or selling a home is expensive and time-consuming because of all the different companies you have to work with,” Hanna said in a statement. “Communication becomes a game of telephone because of all the parties involved. We are disrupting the traditional model and saving customers thousands of dollars by combining technology, a team of experts, and a one-stop-shop for real estate. Technology has changed everything except the real estate business model. That time has finally come.”