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In 2021, a series of Series D funding will give HomeLight “Unicorn” status. It’s a painfully corny technical term coined in Silicon Valley’s Brotank to describe a company worth a billion dollars.
That rating can often come up at Clever Real Estate, a company that runs a very similar model, only different in the way they generate leads.
Clever’s Tony Cahal said in a phone call with Inman that the company has 18,000 agents in its nationwide network and that more than 20,000 sales have been driven by its services on its website.
“A typical online prospect closes a deal about 3-7% of the time, but our win rate is 13-17%,” says Cahal.
Clever Real Estate finds leads through extensive content marketing, a series of articles on its website designed to educate consumers on a wide range of real estate topics. The company uses call-to-action, published research, and other tactics to vette potential viable buyers and sellers, explicitly stating that users are ready to talk to agents. Only then will the matching process begin.
An internal team further scrutinizes the person, gathering basic details such as budget, location, wishes, needs, and other items essential to defining a quality lead.
Leads generated in areas where there are competing agents registered with Clever are sent to the top agents based on the company’s performance evaluation. There is also a timed response mechanism for claiming leads.
HomeLight, a consumer-agent matching platform, uses advertising on national television to collect leads for real estate agents.
Its motto is that consumers can save money and work with “top” agents. The last part is harder to prove, but the first is not.
the method is easy. Companies ask agents to do more work, so they pay less. It’s just a numbers game. The agent then pays her HomeLight these lead acquisition costs at close time. There is nothing malicious or inconvenient about it. It’s just minion referral marketing.
In addition to charging agents a 33% commission on referrals (25% after 10 years), the platform also offers various services such as HomeLight Trade-In and HomeLight Cash Offer. Zillow (35%) and OpCity (30-40%) charge more than HomeLight on average.
Not everyone agrees with Clever and HomeLight’s business model.Inman spoke home openly In 2022, founder Dmitry Shkipin filed a lawsuit against HomeLight, claiming that the referral model was just hiding rebates.
Shkipin’s company uses transparent competition between member agents as a way to save money for consumers.
According to the company’s website, “Our revenue is generated from optional advertising from the real estate industry with the added value of network effects.”
Regardless of how these companies attempt to help consumers save money, it is very likely a futile attempt at first. juxtaposed with other benefits. This was the topic of his talk at Inman Connect New York last month.
Brian Boreo, CEO of marketing firm 1000Watt, shared a large survey of 1,000 millennials that consumers want an easy transaction above all else, with many speculating. I made it clear that it doesn’t matter how much money you save.
“Commissions have decreased by 15% over the last 30 years, but it’s not trivial,” he said. “But more than half of that decline he did before 2000, before the launch of Redfin, before the launch of the formidable Zillow, before the launch of Opendoor, which shoots the moon.”
Fifty percent of 1000watt survey respondents said they would accept an offer of cash for less money if they had confidence that the process would be quick and the transaction would be completed on time.
According to Boero, what people want is less stress while trading, not a pitch about commission costs.
“If you look at people who have made purchases in the last three years, 36% said their agents didn’t even need to explain how they were compensated,” he said. “According to statistics, 10% didn’t know how agents were compensated. That’s not a hot-button topic.”
Clever’s content education model is certainly worth it. The more information a buyer or seller obtains before engaging an agent, the less pain an agent can endure. After all, time kills the deal. The sooner the decision is made, the more likely the act will be recorded.
Maintaining current affairs also uses content marketing to help agents win business. However, we do not drive lead engagement or charge referral fees, instead using a content subscription model to give agents the freedom to spend what they pay. KCM charges for content, not leads.
According to Cahal, who helped HomeLight excel in this space, Clever now measures about 10 million visitors per year. The company plans to build a large agent portal to measure leads and help them communicate, among other features.
Some leads come over time through patient branding, market learning, and creative outreach. Some people come to their child’s recital with a name tag.
But agents need to understand that they are still paying for leads, even if they somehow maintain their position in the industry.
Email Craig Lowe
