Thanks to online aggregator sites, 51 percent of home buyers found their dream home on their own in 2016 without the help of a realtor. However, once you find your next home, you usually still need to connect with a listing agent to see the home or attend an open house.
SimpleShowing takes the middle man out of the equation by letting you schedule a showing on your own through their app. Once you’re ready to buy, the end-to-end real estate platform will function like a traditional realtor to help you make an offer and negotiate.
“The question is, why is it that consumers cannot enter a property that’s for sale for 10 minutes? Because showings usually take about 10 minutes. That’s the crazy thing, that consumers are required, in order to get inside a property, to have a real estate agent accompany them,” says founder Fred McGill.
Better yet, since you did all of the legwork as the buyer, you get to keep a chunk of the agent commission upon closing. SimpleShowing’s refund model caters to those buyers that already know location, size, and price of the home they want to buy. The less showings you schedule through the platform, the more money you get refunded. In 2017, buyers received an average commission refund of about $5,200.
Here, McGill shares how he came up with the idea, what they are looking for in funding, and how they hope to scale their product in the next six months.
How did you come up with this idea?
I had a product development class in 2014 where they paired you with four or five different people and everyone has their own business pitch. I’m not a realtor by trade — I had been flipping houses for probably four years at that point, but I didn’t have a real estate license. I was actually working at Salesforce while I was doing these houses on the side.
It was just so painful to find a way to get into houses, because I didn’t necessarily need a real estate agent to find the properties. I was really good at looking on my own, to be honest with you. One of the guys in the group was in commercial real estate and felt the same way. I discovered that we just needed access. I started customer discovery after leaving my job in January 2017.
How does the SimpleShowing process work?
The way it works is you just download the app and pick a specific property. The concept is you type in that address, pick a specific time, and a partner agent will meet you there.
Our typical customer is someone who has some degree of comfort with shopping on their own. Maybe they’re familiar with the specific area, like, “Oh, I know I want to live in Inman Park or Edgewood, and I’m not really going to look anywhere else.” Or we’ve often seen some success with people that have already bought one house in the past so they’ve already been through the process once. We coordinate an appointment time for them and they put in the offer through us if they like it.
We closed our first transaction in March of 2017. We finished the year with almost 50 transactions; we’re planning to do over 100 transactions this year. The breakdown is split probably 60 percent listings, which means the sales side of transactions, and about 40 percent on the buy side.
What kind of support do you offer through the on-demand service?
The typical service that is attached to the buyer side of the equation in residential real estate would be the offer process, the negotiation attached to that, inspections, due diligence with a specific group of partner lenders that we work with. In terms of the pre-closing process, we’ll coordinate all the emails between the closing attorneys and actually show up to the closing as well. We’re there with the buyer at that point, too.
In terms of services, it’s very similar to a regular agent, except the biggest difference is that we kick back half our commission. To date, for 2017, the average commission refund that we paid out was around $5,200.
How does the refund work?
The commission refund actually scales down based on the number of showings we do. In other words, if you have a specific house that you have in mind and you’re like, “I know I’m gonna buy this one. I know I’m putting an offer on it, I saw it in the open house,” then we can arrange that showing, write an offer, give you half the money back. That has only happened this year like five or six times.
What really happens is we scale the commission down based on the quantity of showings. For example, after they see 20 properties, booked through our mobile app, then it gets scaled down to 1.25 percent of the purchase price, which is a little less than half the commission back. After they get to 30 showings, it goes down to one percent, so it keeps going down.
What’s your current funding status?
We’re talking to a local angel investor and we’re close — within the next six to eight weeks — to closing a $200,000 round. Our goal is to try and bring on another investor as part of a larger seed round this spring, which is when we finish this accelerator in Birmingham.
What’s next for SimpleShowing in the next six months?
The biggest things would be further expansion and development of our mobile app, including additional features for both buyers and sellers. It really only works for buyers right now.
One of those features, similar to Airbnb, would be that if the buyer is pre-vetted, the seller should be able to approve their 10-minute visit to see the home for sale. Currently you pre-vet the agent; we want to do the reverse. We’re going to create some functionality in the mobile app that allows us to create a layer of trust between buyers and sellers and allow sellers to approve showings.
We started in Atlanta in January. About a month ago we expanded to Tampa and Orlando. We’re also most likely going to be offering real estate services in Birmingham since we’re going to physically be there for a few months. We’ll be in three states within the next month or two. That’s followed by hiring a director of engineering to be a technical lead as we expand.
Inline photo from The Consumer Show by Jason Seagle