HomeLight

HomeLight
Industry Real Estate
Founded 2012
Founder Drew Uher, CEO
Headquarters San Francisco
Website www.homelight.com

HomeLight is a real estate referral company based in San Francisco, CA. Although HomeLight is itself a real estate broker, it does not provide services typical of a broker. Instead, HomeLight works with a network of participating real estate brokers in various markets to which they refer customers.[1] The company aims to connect people selling their homes with local real estate agents.[2][3] HomeLight has listed over $3 billion in homes since its foundation in 2012.[4] The company was founded with an initial investment by Google Ventures.[5][6] HomeLight raised a total of $55 million in funding since its establishment.[2] The company analyzes over two million real estate agents with its algorithm based on specialty and qualifications.[6][7]

History

HomeLight was founded in 2012 by Drew Uher, the company's CEO,[3][2][8] after he and his wife had difficulty researching agents based on needs or qualifications.[2] The business, which was originally aimed at buyers, focuses on sellers.[4]

In February 2015, the company received $3 million in funding led by Bullpen Ventures, with participation from Montage Ventures, Crosslink Capital, Krillion Ventures, 500 Startups and Western Technology Investment.[6][9] In 2016, HomeLight received $11 million in funding from Zeev Ventures.[10] By 2017, the company had raised a total of $15.5 million from investors.[3] In August 2017, HomeLight raised $40 million in Series B funding in a round led by Menlo Ventures with participation from Citi Ventures,[3][11] as well as previous investors Zeev Ventures, SGVC, Crosslink Capital and Innovation Endeavors.[2]

In January 2018, HomeLight announced a partnership with Yelp to add data from HomeLight's algorithm to Yelp's Home Services listings.[12]

Overview

HomeLight's algorithm ranks agents according to data including sales and agent records from over 100 sources and approximately 30 million transactions nationwide.[3][8] The algorithm ranks agents by price range, neighborhood, property type and experience level.[5][6] Some real estate agents have reported they feel HomeLight is biased in favor of realtors who sign a referral agreement with them.[13][14] HomeLight claims their algorithm ranks agents regardless of agreement status and the agent pays a service fee only after the transaction is complete.[2]

Referral Fees Criticism

HomeLight is paid from the agent’s final commission in the form of a 25% referral fee. Matched results provided by HomeLight only include real estate agents who have agreed to pay the referral fee to HomeLight after the transaction is complete. While HomeLight ranks real estate agents independently of their referral status, it does not match real estate consumers with agents who have not signed their referral fee agreement.[15] Referral fees generally result in what antitrust experts label as "reverse competition" - competition not for the consumer attention but for the attention of middle-man who steers the consumer toward its network of brokers and away from competitors. Such steering may result in lower quality of service or higher commissions, fees, and price levels.[16] Some real estate agents advocate that referral fee brokers make consumers a commodity that the referral broker is selling to another agent.[17]

References

  1. ↑ US GAO. "Real estate brokerage factors that may affect price competition: report to the Committee on Financial Services, House of Representatives" DIANE Publishing, ISBN 1428933999
  2. 1 2 3 4 5 6 Omri Barzilay (August 15, 2017). "HomeLight Raises $40M In Series B Funding To Help You Find A Listing Agent". Forbes.
  3. 1 2 3 4 5 Ryan Lawler (August 15, 2017). "Homelight raises $40 million to help home sellers find the best real estate agents". Tech Crunch.
  4. 1 2 Alastair Dryburgh (January 6, 2018). "Don't Disrupt; Work With Existing Forces". Forbes.
  5. 1 2 J. O'Dell (November 14, 2012). "HomeLight aims to change the real estate business with Google funding". Venture Beat.
  6. 1 2 3 4 Anthony Ha (February 4, 2015). "HomeLight Raises $3M More To Help Homebuyers And Sellers Find Real Estate Agents". Tech Crunch.
  7. ↑ Rip Empson (November 15, 2012). "Backed By Google & Eric Schmidt, HomeLight Launches A New Way To Find The Best Real Estate Agents". Tech Crunch.
  8. 1 2 Susan Taylor Martin (December 28, 2017). "Do seller-Realtor matching services work? We put two to the test". TBO.
  9. ↑ Bob Shallit. "Real estate matchmaker identifies top Sacramento agents based on data". The Sacramento Bee.
  10. ↑ Sindy Nanclare (April 18, 2016). "Real estate marketplace HomeLight closes $11 million deal". Venture Beat.
  11. ↑ Roland Li (August 15, 2017). "S.F. startup raises $40 million to rank residential real estate brokers". San Francisco Business Times.
  12. ↑ "HomeLight Partners with Yelp to Provide Data-Driven Insights on Real Estate Agents". Business Wire. January 9, 2018.
  13. ↑ Gary Lucido (November 2, 2017). "Can HomeLight Really Get You The Best Real Estate Agent?". Chicago Now.
  14. ↑ Gary Lucido (November 9, 2017). "How HomeLight Finds You The "Best" Real Estate Agent". Chicago Now.
  15. ↑ ""HomeLight Terms of Service"". Retrieved July 14, 2018.
  16. ↑ Barlow Burke. "Law of Real Estate Brokers" Aspen Publishers Online, 2007
  17. ↑ Elizabeth Weintraub (February 15, 2017). "Should You Hire a Referral Agent?". The Balance.
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