SimpleShowing, an online real estate startup disrupting the traditional real estate brokerage by changing the way buyers ...
Home buying is stuck in the 1980s
Technology has changed how people buy and sell almost everything. In 2021, homebuyers have access to detailed property data, home values and other tools that have historically only been available to real estate agents. But despite having access to more resources, consumers still (begrudgingly) rely on real estate agents - even as home prices and Realtor commissions continue to rise.
Consumers today are taking on much of the work in the home buying and selling process, because, simply put, they can. Finding homes online is easier than it’s ever been, accessing property data is faster and more accurate than ever before and writing an offer on a home can now be done electronically.
Consumers are beginning to demand new alternatives. There's been an emergence of tech-enabled real estate startups like Opendoor, which IPO'ed in 2020 at $18B. Opendoor, a 6 year old company is valued 10x higher than incumbent ReMax. ReMax, which is a 50+ year old business, has $1.3B market cap despite boasting considerably higher revenues than Opendoor.
The tide is turning...
Ten years ago, the most critical role of the real estate agent was to scour the MLS to find suitable properties for the homebuyer. But today, most consumers search online themselves. According to the National Association of Realtors, consumers now cite property access as the most critical reason they hire an agent.
While homebuyers are putting in more work to find their next dream home, they still pay thousands in commission to traditional agents—even if all the agent did was unlock a few doors and write the offer. Perhaps one of the biggest reasons for this is that they don't understand the mechanics of how their agent is paid. Perhaps the biggest disconnect with homebuyers today is that they've been led to believe their agent is providing a "free" service.
The truth is that the home buyer in effect pays the buyer agent commission because the commission expense is baked into the price of the home. Said another way, you could save 3% (avg. buyer agent commission) if you did not bring an agent into the transaction when purchasing a home.
SimpleShowing automates the tour process, saving home buyers time and money
SimpleShowing users can search for homes and book their own tours through our easy-to-use platform without the burden of researching, interviewing, or hiring a traditional agent for an unnecessarily high fee.
With SimpleShowing, home buyers can easily book showings for individual properties or create and manage a tour of multiple homes through our platform. Not only can users view homes that are listed through SimpleShowing, but also book showings for any home listed with any brokerage.
We reward consumers for doing what they're already doing - shopping for and finding homes on their own. Our homebuyer customers get refunded up to half of the buyer's agent commission - on average, about $5,800.
Utilizing real estate services is exorbitantly expensive for consumers and yet no great alternatives exist. Agents are actually doing less work per transaction than ever before, but getting paid the same commission rates as they did 50 years ago.
Over the last 3 years, we've been able to efficiently serve homebuyers at a drastically lower cost than traditional brokerages and deliver savings back to our customers - resulting in a viral loop where customers tell their friends and family, and even re-sell their home through us when they're ready to buy again.
Proprietary "Self-Tour" technology
Our proprietary "Self-Tour" technology allows homebuyers to tour select properties without an agent. We believe this is the future for home showings. Self-guided tours became mainstream about two years ago when Opendoor, a real estate tech company, began installing digital locks on their real estate listings. Consumers now expect this convenience, and brokerages nationwide are scrambling to replicate similar services for their own home listings. We're ahead of the curve. Plus, our technology is patent pending.
Self-Tour was birthed from a demand from SimpleShowing customers who wanted to view homes independently, without an agent. But over the last 12 months, we've uncovered a tremendous appetite for Self-Tour applications from 3rd party agents, brokers, and regional MLS's (multiple listing services). That's why we recently launched the beta version of "Toura" - an exciting new product that's joining to the SimpleShowing tech stack. We expect Toura be a core part of our B2B go-to-market strategy moving forward, as we move beyond just offering innovative solutions for homebuyers -- and build a recurring revenue platform geared towards other brokerages and associations and even MLS's.
Aside from the convenience of booking tours independently, one major benefit of our model is our commission refund program. We offer homebuyers a cash contribution of up to 1.5% of the final sales price - which is typically used to pay for the buyer's closing costs.
The 1.5% refund equals half of the buyer's agent commission we receive for representing the buyer. On average, the refund is about $5,800 and creates an incredible advantage for the buyer, ultimately making the home purchase more affordable.
Changing the system for the better
We’ve already helped consumers save more than $1 million in real estate commissions; and over the past three years, our company has grown at an aggregate growth rate of 41%. During the busiest home-buying months, we bring in more than $100,000 a month in revenue.
Our user growth has exploded since 2018 with a 140% increase in the last three years. We've experienced 41% compounded annual revenue growth during the same period.
More than 2,500 property tours have been booked through our platform with bookings increasing each month; and more than 60% of users convert - ultimately purchasing a home through our platform.
We've also witnessed a significant increase in web traffic over the last 12 months due to increased brand awareness and improved marketing mix.
We've expanded our geographic footprint each year, and our brand awareness continues to grow. Our newly launched product, Toura, is designed to help us access MLS data from markets across the country, allowing us to scale to new cities and states in the months ahead.
Unlocking homeownership for millions of Americans
Our customers love us! Now that we've successfully established a loyal following of homebuyer customers, we're eager to build upon our success and attract more home sellers, mortgage customers, and soon MLS's (multiple listing services).
Our commission refund provides access to homeownership for an entirely new segment of the home buying population. Our average refund of $5,800 is often the difference between someone renting and owning a home.
Growing margins & adding new revenue streams
- Our main revenue source comes from real estate commissions that are earned when a customer either buys or sells a home.
- We also earn shared revenues that occur when a homebuyer purchases title insurance at the time of closing.
Adjacent Revenue Opportunities
Recent partnership in January 2021 with title insurance startup, Expetitle Exchange, will lead to a 10-20% increase in net revenue per each home seller closing.
Upcoming launch of mortgage offering will provide an additional 20-30% in net revenue per homebuyer.
Establishing a Recurring (SaaS) Revenue Stream
Our beta product “Toura” is central to the growth of our brand. Our vision for Toura will enable us to scale to new cities without formally obtaining a broker's licenses in each expansion state.
Toura will also be the basis for our B2B platform, allowing us to move beyond just offering innovative solutions for homebuyers -- and build a recurring revenue platform geared towards other brokerages and associations and even MLS's.
The largest undisrupted market in the U.S.
Residential real estate is one of the largest industries contributing to the U.S. GDP, with 5.34 million existing homes sold in 2019. Yet, it’s also one of the most fragmented and ripe for disruption.
Overall, U.S. real estate agents make $80 billion per year in commissions. Mortgages for new home transactions account for $1.3 trillion a year, and title insurance premiums cost U.S. home buyers and sellers $16 billion a year.
VC interest in real estate tech is growing rapidly
In the last five years, venture capital groups and Wall Street have come to the firm conclusion that technology is going to change how people buy and sell homes. The private capital invested in real estate technology companies increased from $138 million in 2013 to nearly $3 billion in 2018.
More affordable and efficient than traditional agents
We primarily compete with traditional real estate agents by offering technology-enabled tools, lower commission rates, self-booked tours, and a more seamless and verticalized experience. Upstarts like SimpleShowing have a major tailwind versus the incumbents because of the shifting consumer behaviour of young millennial homebuyers, who represent the largest home buying demographic as of 2019.
We also compete with startups and "hybrid" brokerages. Currently, we're the only company that has built a proprietary lockbox integration for self-guided, in-person property tours. Unlike many other hybrid brokerages, SimpleShowing also does not rely on referral partners; but rather dedicated agents that service only SimpleShowing customers. We are one of the few real estate tech companies that span both B2C and B2B use cases - giving us greater versatility as a business and additional revenue opportunities compared to other real estate tech startups.
Fundamentally changing the home buying process
When we launched in mid-2017, our initial vision was simple - make it more convenient and affordable to tour homes. Since then, we've expanded our mission to one that is more ambitious and disruptive.
Our long-term objectives
- Enable buyers to independently search for homes, schedule tours and make offers on properties - either with or without an agent.
- Build a vertically integrated home buying experience. This means a single platform that the home buyer can use to shop for a home, tour a home, and get a mortgage.
- Build a digital closing experience that leverages remote online notarization to facilitate a fully online closing.
- Create network effects and scale through multiple listing service data providers who interoperate with our digital showing technology.
Establishing network effects
We are opening up an entirely new revenue channel with our beta product, Toura. Toura is a B2B, SaaS product that allows for online scheduling of showings via an API to local MLS. This one deserves even more detail so check out further info below:
Today, SimpleShowing operates in 3 states and 5 major markets. After launching our 5th market (Dallas, TX) in 2020, we began researching and planning which markets to open next and when. Around the same time, we began to see an increase in inquiries from independent/3rd party real estate agents who were interested in leveraging our technology or bringing SimpleShowing to their local market. Through many conversations and much research, we discovered there may be a better (and faster) way of opening new markets in a more scalable way.
This was when and how the exciting idea for Toura was birthed. Across the US, there's an appetite for better showing technology and even for Self-Tour. This is something we've spent three years building and refining. Now, our charge is to re-package SimpleShowing's technology and market it to MLS's, brokerages and agents throughout the country. Let's gooo!
Raised over $1.6M to date
To date, we've raised over $1.6M with $1.07 coming from our previously sold-out campaign on Republic and a strategic investment from Bill Smith, Founder of Shipt. We were accepted into Launch's Founder University (2019) and 500 Startup's Founder Bootcamp (2018). SimpleShowing also participated in Velocity Accelerator (Birmingham, AL) and Wave Accelerator (Tampa, FL), both part of GAN.co (Global Accelerator Network).
Previous success in startups and real estate
Prior to founding SimpleShowing, Co-Founder Fred McGill was an early employee at successful venture-backed startup Redox, where he served as VP Sales & Marketing and was employee #17. Fred built the sales/marketing team from 3 people to 12 people and ramped sales from $20K MRR to $90K MRR in 1 year. Redox has since raised $75M from Battery Ventures and RRE Ventures. Prior to his time at Redox, Fred worked at Salesforce.
Several other team members also come from successful, venture-backed startups, including Matt Carhart, Director of Growth - who previously served as the Head of Marketing at Techstars startup TommyRun. In addition, our core team of agents has a combined 50+ years of real estate experience from various large and small brokerages.