Amit Haller is living the American Dream. He sold his startup for US$42 million back in 2006 and became a Bay Area real estate tycoon. Now, he’s launched another tech startup taking on the real estate industry with a new way to buy and sell homes — entirely though an app.
The new company, Reali, came from the experience he and his business partner, Ami Avrahami, had as real estate investors.
“We bought and sold hundreds of houses and rental properties, and did development from ground up. We saw many different angles in real estate. I’ve walked with, and I’m not exaggerating, over 100 different agents,” Haller tells us.
These days in the Valley’s insane real estate market, every purchase is a frustrating bidding war that relies too much on the realtors, he believes.
“Why does a simple negotiation become so complicated? Our agent needs to negotiate with the other agent who needs to negotiate with the seller and many times it’s going nowhere, and you never know where the message broke,” he says.
He tells the story of his friends who lost out on their dream house because their agent went to a party for a few hours. By the time the agent saw an email from the seller’s agent, the seller had already accepted a counter offer.
And there’s no way to tell if you are losing a bid for a relative pittance, he says.
“To find the perfect home takes time and then to lose it by $10,000 to someone else is very frustrating,” he says. “If I could just know it would take another $10,000 to win it, that’s nothing when Bay Area pricing is $2 million for a home.”
So, being techies, Haller and Avrahami built an app for their own use that would put them in control, and move the human realtor into a supporting role. They liked it so much, they decided to release it to the public and launch a new company.
Self-service real estate
There are lots of apps that let you browse a home online, and Reali matches them.
However, with Reali, you apply to become a qualified buyer through the app, submitting the documents of your pre-qualified loan. A human reviews those documents and validates them.
Once you are a qualified, you go shopping. If you see something you like, you schedule a tour. The app can unlock the door, so a human realtor doesn’t have to accompany you. And beacons placed around the home will alert the app to the home’s unique features so you don’t miss them.
“When I buy a house, I want to be there myself to see it, feel, it sense it. If you have a question, you can click and someone can answer,” Haller says, meaning a live human agent is standing by through the app to answer questions about the property.
If you like the house, you submit your offer through the app, too, and then conduct the bidding through it and are informed of counter offers.
“It’s a broker in your pocket,” he says.
On top of that, Reali charges a flat fee of $2,950 to be the buyer’s agent, and will reimburses the buyer’s agent commissions at the closing of 2.5%.
On a $1.7 million home, that rebate will save put around $40,000 of cash in your pocket, Reali says. Reali charges 4% commission on houses it lists as the selling agent.
The downside: Reali is currently only available in California, with listings only in the Bay Area. California is the company’s first brokerage licence. However, the company plans to eventually expand to more cites and states starting in about a year, Haller says.
Here’s the full promo video to give you a better sense of what working with an app instead of a real estate agent.