Flat-fee real estate company Home Bay’s latest ad starts off simply enough — two guys, who happen to be skateboarding legends Mike McGill and Tony Hawk, stroll to the backyard of a two-story hillside abode with pristine views of a beach and a private skating pool.
While taking in the scenery, Hawk begins asking McGill how he managed to nab such an awesome listing.
“Home Bay,” McGill explains. “Oh, it’s the new and modern way to buy and sell real estate. With their technology, it makes the traditional real estate agent obsolete. With all the money I saved on commission fees, I was able to afford a bigger place with a pool.”
McGill begins scrolling through Home Bay’s app while pointing out how easy it is to set a price, schedule a photo shoot, market the home, file necessary paperwork and have instant access to a team of real estate professionals all for a flat fee.
After that, Hawk is convinced: “Traditional real estate agents are going to go extinct when they hear about Home Bay.”
Later, McGill tells Hawk he “felt sorry” for his real estate agent and gave him a new job, which includes cleaning the pool area and holding a Home Bay sign for Tony Hawk to skate on.
Ken Potashner, chairman and CEO of Home Bay Credit: Ken Potashner/ LinkedIn
Home Bay CEO and chairman Ken Potashner says the ad has caused an “explosion” in interest from consumers excited to take advantage of Home Bay’s automated process and the subsequent savings that average a little over $15,000, according to the company, which presently operates in California, Florida, Georgia, Illinois, Texas and Colorado.
Sellers are able to enter their address and property type, determine a list price, schedule a photography session, request a yard sign, syndicate their listing to the MLS, set up an inspection, schedule tours, review and accept offers, and get expert help all at the click of a button.
Sellers pay a flat fee ranging from $2,000 to $7,500, based on the home’s listing price, and they are encouraged to pay buyers’ agents the traditional 3 percent commission.
Buyers also have an automated process where they are able to view listings, schedule visits and make offers all from the Home Bay platform, and are refunded 50 percent of the buyer agent commission to their escrow account.
But the comments on the ad haven’t all been positive — a quick scroll through the comment section reveals worries that Home Bay may be oversimplifying transactions and underestimating the importance of agents.
“Selling a house is serious business. There is so much more than a simple ‘bill of sale.’ Is not as easy as these infomercials imply,” wrote a commenter. “There’s a reason why Realtors are schooled and licensed. Read the fine print and get informed. Find out who will be handling your transaction and how much experience they have.”
“What happens when the city sends a note saying the second unit is illegal on the day of closing?!” said another.
Potashner says the savings Home Bay is able to offer buyers and sellers isn’t because his company is skirting on service — he says his tech platform makes everything more efficient and faster, with an average sale time of 38 days.
“The platform does the lion’s share of the work,” Potashner says while noting Home Bay spends an average of 90 minutes of human interaction on each transaction, compared to 50 or 60 hours spent during a traditional transaction. “We’re spending less labor, so we’re able to cut the price dramatically.”
“With that said we’re full service,” he added, saying that Home Bay does have a dedicated team of legal experts that help buyers and sellers navigate legal issues should they arise.
In the end, Potashner says there will always be naysayers who say Home Bay’s approach won’t work, but he always points other examples of industries that have embraced a similar experience and succeeded.
“And we reference things like Turbo Tax — where everyone would grab all their stuff and go to the CPA, and now they have a software package that helps them do their taxes,” he said.
With an additional $13.5 million in funding, Potashner says Home Bay will be rolling out a more aggressive marketing campaign and a plan to expand to 20 new states by the end of 2019.
“We’ll be doing more branding, more internet exposure, and more radio exposure,” he said. “So we’ll be turning up the crank on our marketing agenda.”