The Customer-Centric View: Why I Started Properly
Residential real estate is broken. If you’ve sold a house before, you’ve probably experienced this firsthand as you paid your broker $15,000 or more just to enter your house details on the MLS and Zillow and then schedule a few showings. If you are planning on selling your first home and have started speaking to some brokers, you might be surprised to learn that it’s near impossible to negotiate down the listing fee below 6%. Even brokers have recognized this problem. One broker who I spoke with called her own profession a “necessary evil.”
I’m Ben Kubic, and I founded Properly because I have never seen an industry in such desperate need of disruption. The internet has reduced transaction fees in almost every other industry, and yet the 5-6% commission has remained completely stagnant despite the fact that technology has reduced both the need for and effort required from a traditional broker.
I am not, nor have I ever been, a broker (although we do have some great, forward-thinking brokers on the team). As such, when I went to design a better home sale process, I asked hundreds of homeowners how they’d like to see their sale go before worrying about how the process works today. Here are the top 4 things I heard, and how we incorporated them into Virgent:
“I WANT TO GET THE BEST PRICE FOR MY HOME”
Pricing has to be done by a human being. This may be surprising coming from a company based around technology, but recommending a price is one of the most important parts of listing a house and automated pricing engines such as Zillow’s Zestimate routinely produce bad recommendations. Zillow openly reports how poor its accuracy is. Even the market with the best estimates is off by more than 5% on average, which can mean up to $50,000 of error depending on the price of the home. Homes that are priced correctly get more offers than those that are overpriced.
To make sure we get this right for every house, we not only include a professional appraiser to assess each home, but we also have an experienced broker review area comparables and the house photographs to determine the best listing price. We use a data-driven approach to make sure each home is attractive to buyers while still getting highest price for our sellers.
“I WANT TO FIND HIGH-QUALITY BUYERS THAT ARE READY TO MAKE A PURCHASE”
50% of buyers younger than 50 find the home they end up purchasing on the internet, according to the National Association of Realtors. Less than 1% of homes are sold through an open house. Listing a property online takes an agent less than 10 minutes, while an open house requires the homeowner to be out of his house for 4-8 hours at a time. The reason agents hold open houses is to help them find new clients, not to help a homeowner sell theirs.
For Properly, this meant finding the most effective means of marketing a home without burdening the homeowner. That’s why we list properties on all the major listing sites, include a yard sign (which a surprising 47% of buyers still use in their home search), and screen all prospective buyers to make sure they are serious before scheduling a showing.
“I HATE FILLING OUT PAPERWORK AND CONSTANTLY CALLING MY BROKER”
Even in 2015, many brokers still required clients to sign forms in person and even send vital documents in the mail. I heard nightmare stories of scheduling showings where the buyer calls their agent to set up a showing time, who calls the seller’s agent, who calls the seller, who can’t make that time, so the seller’s agent calls back the buyer’s agent… (and it goes on).
It was easy to reduce this friction. With the inclusion of e-signature tools and an online scheduling application, we’ve significantly reduced the amount of time sellers waste on paperwork and calls while simultaneously creating a better experience for prospective buyers.
“THIS IS THE BIGGEST TRANSACTION I’VE EVER MADE, AND I DON’T WANT TO MESS IT UP”
When I started working on Properly 4 years ago, I thought I could take the human element out of the process in the name of efficiency and cost savings. I quickly learned I was wrong. While almost all the sellers I talked to were unhappy with the traditional agent and commission model, these homeowners also made it clear that they do want to be able to talk to a human being when they have a question. As such, all our clients can call, email, or text an agent at any time. We want to make the process of selling a home very simple, but we also want to make sure our sellers feel they have the support they need.
Our team has spent a lot of time developing a better way to sell a home, but we know we can do better. We want to hear your ideas as well. If you give us an idea that we end up implementing on the Properly platform, we’ll help you sell your home or the home of one of your friends for half price. Email us at [email protected] to let us know how we can make the process better.