The biggest difference between the U.K. and U.S. real estate scenes is that, across the pond, buyers are enormously underrepresented and rarely supported.
In the United Kingdom, the power is all in the hands of the sellers. Buyer’s agents are rare — fewer than 0.5 percent of transactions involve them, and they tend to operate at the higher end. Agents also take a percentage of the asking price from the buyer rather than the seller.
Jonathan Harris
This unbalanced approach to purchasing a home has led young British entrepreneur Jonathan Harris to start HomeDashboard, an online service designed to help manage the buying process online. Buyers also have the option of partnering with a homebuying team, which serves in a concierge type of capacity.
Harris just launched an accredited real estate agent program in the U.K., and the consumer launch is scheduled for February 14, 2016.
For 95 percent of buyers, the Web-based application will give them access to information and advice for free — the 5 percent wanting more help in making their bid will pay a fee.
Harris, 26, who recently bought his own home, said that HomeDashboard seeks to be far more disruptive to the property market than any online agency model.
“We believe the U.K. property market needs to evolve to properly meet the needs of the digitally connected consumer,” he said. “So we set about making it easy, efficient and enjoyable from search to completion, all in one place.”
Tim Hammond, an experienced online entrepreneur who is backing the company, expanded on the user experience: “We’re empowering the buyer and providing a control panel to their home purchase,” he said.
What’s in it for the user
HomeDashboard users will be able to “drag and drop” properties to their shortlist from any source, including multiple portals, estate agency websites and social media.
They can then automatically book viewings centrally with multiple agents on an interactive calendar, arrange inspections and place offers online in conjunction with the advice, assistance and expert negotiation skills of HomeDashboard’s dedicated team.
Tim Hammond
“We don’t charge for this service unless the buyer wants our buyer concierges to do the negotiation for them, at which point this is our premium service, which is charged on a success fee of 15 percent of the savings we make them off the asking price,” Hammond said.
“So if the asking price is £200,000, and we save them £10,000, then our fee is £1,500. It is only paid on completion. If there is no saving then there is no fee, and you get the full service for free.”
These specialist negotiators will also liaise with mortgage brokers, home inspectors and attorneys on the behalf of buyers.
“It is about empowering buyers to make an educated offer, substantiating a buyer’s price which they offer based on our ‘true market’ value. As we all know, profit is in the purchase,” Hammond said.
HomeDashboard, which is linked with the Land Registry in the U.K., is also identifying off-market properties that might be suitable to buy and approaching property owners by letter. This is a strategy that could also be used in other markets with low inventory.
“Our algorithm will ensure that properties that have been recently bought will not be targeted,” Hammond said.
“We can show buyers the intel on ones to approach and do the approaching ourselves with our automated direct marketing.”
Connections across the pond
The U.K. launch is going to keep Harris and Hammond busy for the next six months, but they plan on bringing their business to the U.S. in the latter part of 2016.
In addition to the U.S., they’re also targeting Canada, Australia and New Zealand as their next markets. The business partners see these areas as being a logical choice for expansion, as they share many similarities when it comes to homeownership.
“The buyer-agent model is well-known in these markets, but it does need to be shaken up so that the model is aligned to the buyer’s best interests,” said Hammond, who spent a couple of years in Silicon Valley in the 1990s with an online shopping startup and has venture capital contacts here.
“It would be pretty straightforward to do HomeDashboard in the U.S., as the model would work easier with the MLSs.”
The U.S. buyer-agent business model has been criticized for not working in the best interest of the buyer, he said, with the buyer’s agent earning a percent-based commission of the agreed sale price, which is split from the listing agent.
“Clearly, that should be changed if the U.S. real estate industry is going to be truly customer-centric as HomeDashboard is,” Hammond added.
Hammond and Harris already have contacts in U.S. real estate. They have built a relationship with Colorado Springs-based personal video email marketing business BombBomb and run an equivalent company called Agent Vox serving agents in the U.K.
They are using the same technology on HomeDashboard so buyers and agents can communicate face to face online to talk about properties and arrange meet-ups.
HomeDashboard hopes to partner with BombBomb in the U.S. and be introduced to the company’s real estate contacts here. BombBomb has relationships with around 14,000 agents and customers including Zillow and Real Estate Webmasters.
“We will be looking to build a network of partner buyer’s agents to deliver our solution to homebuyers, along with the benefit of BombBomb’s personal video technology — some of whom will already be using it,” Hammond said.
Darin Dawson, president of BombBomb, indicated his cooperation. “We would help in any way we could,” he said.
The closest competition for HomeDashboard in the U.S., meanwhile, would be Redfin, Hammond said.
“Redfin is doing some great things in the U.S. to be customer-centric, like only charging fees based on customer satisfaction,” Hammond continued.
“But at HomeDashboard we think we can go one step further and provide a tremendous amount of ‘buyer concierge’ help for free, and then only charge a fee based on results we achieve in securing a discount off the purchase price.
“Ultimately a buyer’s price or starting offer would help with transparency — and I believe the millennial generation and Generation Z buyer will be demanding this.”
Evolving expectations for agents
Hammond predicts that, with companies like HomeDashboard around, the role of the agent will change.
“They will become largely the expert negotiator mixed with concierge,” he said.
“They know the local area, what areas are good and what price the buyer should offer — and they will help them do that. But do they need to go and open doors for them? Probably not in the same way.
“If agents work with companies like us or Redfin, then they have the online dashboard consumer-focused part, which they can provide services to as part of the expert team. That’s the future we believe in.”
HomeDashboard will work with partner agents and local experts so it becomes a hybrid model that can scale. The idea is that experienced agents who are good at what they do will get paid based on merit, but existing infrastructure will do the lead-generation part for them.
The network would bring together strategic partners for mortgage brokering and referrals.
“That’s how we also work in the U.K., in conjunction with a panel of mortgage brokers here including Mortgage Advice Bureau,” Hammond added.
Stopping the vicious circle
Will homebuyers ever truly be able to take control in a market where demand exceeds supply? Hammond has a response to this.
“The sellers are also buyers, and if they can’t find anywhere to buy, then they won’t move, and this is one reason why stock transactions are so low — it’s a vicious circle,” he said.
Property owners will find themselves on both sides of the buyer-seller equation. Hammond envisions the best solution for everyone as one that helps people follow through on their homebuying purchases, which frees up more housing stock for all parties involved and propels an ongoing system that identifies available property.
And that’s where services such as HomeDashboard aim to fill a big gap.
“With HomeDashboard, every home is a prospective purchase, in the same way that every spare room is a prospective room to rent with Airbnb, and everyone with a car, a prospective Uber taxi driver,” Hammond said.
