Abode, a company that is trying to streamline the home buying process while providing deep discounts to consumers, has acquired discount brokerage USRealty as it works to expand its reach across the U.S.
The acquisition was announced last month, with Chicago-based Abode saying in a statement that the purchase creates the opportunity “for further expansion using USRealty’s national broker license footprint.” Abode CEO Kyle Stoner told Inman that his company and USRealty first began a partnership in mid 2018, and finalized the acquisition at the end of last year.
Kyle Stoner
“It’s a really great complimentary combination because we kind of built all this technology and partnerships on the buy side,” Stoner said. “And they had done all that on the sell side.”
The financial details of the deal were not publicly disclosed.
Stoner and Chief Technical Officer Carson Junginger founded Abode in 2017 after both having negative experiences buying homes. Stoner said he was amazed during the process that there wasn’t more automation or fully integrated software. Eventually, the two men decided to built those things themselves.
“We started off with this idea that was really simple which was how do we make home buying easier,” he recalled.
The duo spent time in a Chicago-based tech accelerator, and today the company bills itself as a “one-stop-shop real estate platform that simplifies and de-stresses the entire process of buying and selling a home,” according to a statement. Buyers wanting to use Abode can visit the site, answer a few simple questions and end up with a mortgage quote or list of recommended agents. The company also offers tools to help homebuyers manage tasks and communicate with agents.
The idea behind Abode’s buyer-focused technology, Stoner said, was to make the actual buying process as easy as the browsing process on a portal like Zillow.
“It was focused on workflow,” Stoner said of Abode’s buyer’s tools. “We’re using the existing residential real estate infrastructure to enable that.”
Over time, however, company leaders realized that they needed to focus on sellers as well, which eventually led them to USRealty. The company bills itself as “better than ‘by owner’ and more affordable than traditional agents.” It also urges sellers not to “give 6 percent of your home’s sale price to an agent. Be the agent!”
More specifically, USRealty gets sellers’ homes on multiple listings services and online portals, as well as host photos and provides phone support, among other things. It charges an upfront fee — prices vary by location but the cheapest tier costs $35 — and promises that sellers will ultimately “pay no more than a 3% commission” when their property sells.
Abode’s acquisition of USRealty comes amid a period of significant consolidation in the real estate industry. Just last week, for example, a pair of RE/MAX brokerages in the Northeast announced they were joining forces. Other notable recent examples include Compass’ acquisitions of Pacific Union, Paragon and other companies, as well as Howard Hanna’s acquisition of Allen Tate Companies.
Abode — now with USRealty onboard — aims to make money by relying on automation and a smaller workforce than other real estate startups.
“Our model is different in that we’re really sort of the software layer between the client and the listing,” Stoner said.
He also said that USRealty is currently available to 85 percent of the U.S.
Abode, on the other hand, currently only operates in Illinois, though it lists Atlanta, Dallas, Los Angeles and other cities as “coming soon.” The acquisition will help the company grow its footprint, Stoner said, with Abode services gradually coming online in markets that USRealty already serves.
Abode and USRealty are already in the process of integrating their respective technologies. For the time being, they will continue to operate under their respective names, though Stoner said the brands will likely be consolidated sometime in the future.
“We are all one company now,” he added.
