Uber has turned the ride-for-hire industry on its head. And now, the founder of the San Francisco-based ride-sharing company is hoping to revolutionize the process of buying and selling residential real estate. But will it help or hinder the sale of a home…
Uber co-founder Garrett Camp recently launched this new web platform called “Haus”. It’s the product of venture capital firm EXPA, which Camp also co-founded.
The Haus team says in a blog post that quote, “everyone loves looking at houses online but when it comes to buying and selling, it’s often described as something to “get through” or “survive”.”
The concept sprouted about a year ago as a way to use technology to improve the buying and selling experience for everyone involved. A few weeks ago, Haus went live.
So far, it is only operating in California, and it only has a few listings, so there are not a lot of properties to look at yet. But this is how it works:
Properties must be listed by a licensed real estate broker or agent and the listing must be “exclusive” to Haus. The listing agent will select the form of contract for offers, an initial submission deadline, and a minimum required offer price.
The listing is then available for viewing by potential buyers, and sellers can keep track of the process online. Sellers can even sign up for texts about offers so they know right away what’s being submitted, instead of waiting for information from an agent.
Buyers can submit offers through their agents but they will be able to review all their documents and competing offers online. The website will provide side-by-side comparisons of offers with the offering price and key terms and conditions.
Personal information will be made anonymous but the website offers “transparency” when it comes to the offer price and terms. If a buyer wants to increase the offer or change the terms, he or she can do so without any guesswork.
This is the revolutionary part – knowing what other people are offering as you head into a bidding war.
Haus is all about “transparency” and letting a prospective buyer know where they stand so they can improve their offer if they want to, without waiting and wondering. It also hopes to make it easier for sellers to decide when or “if” to counter-offer and to whom.
So exactly who can see what information?
The Haus website says that anyone following the home can see that an offer has been made. They can’t see the price or the terms of an offer however, or by whom.
Buyers who’ve made offers can see the price and a summary of the terms by each of the individuals making an offer. They won’t be able to see names or personal information about the buyer, the agent, the loan officer or the lender.
Sellers and their agents can see all the details of each offer except for the name and the age of prospective buyers. Haus says it is doing that to create a “fair” process.
The website says those two details don’t affect the quality of the offer. And the website doesn’t want to create an environment where “bias” could affect a decision on which offer to accept.
Sellers do not have to select the highest offer. They can select any offer based on all the other criteria. It’s just that names and ages will not be among those criteria.
All the documentation is done online through Haus with electronic signatures. Like Uber, Haus is only a platform for Buyers, Sellers, and Agents to interact. Haus does not participate in any part of the transaction.
Haus General Manager Sarah Ham told TechCrunch that they quote, “think the openness will create a more efficient market and that the number of offers and price will ultimately be dependent on demand.”
She says, “Bidding wars are a common, almost accepted, part of the real estate process today. But with our approach, buyers know where they stand”. And she says, “They will know what they need to make their offer competitive but they also won’t negotiate against themselves.”
TechCrunch mentions a few potential downsides to this kind of “transparency”.
It seems that the bidding wars could potentially get out of control. If there’s a “hot home” in high demand, there could be numerous counter-offers with a simple click of the mouse.
TechCrunch also mentions the possibility of “shill bidding”. It says that unethical sellers or agents could participate in the bidding war to artificially inflate the price. It’s not clear how the website would prevent that.
The blog also says that while Haus can help assess the demand for a property, it might also discourage potential buyers who don’t want to get into a bidding war, especially if the property is already expensive.
The transparency process could also leave a seller with a lower offer than he or she might get through the traditional offer and accept process. Inman News says by keeping buyers in the dark about other offers, they might overshoot the second highest bidder, giving the seller a better final price.
There’s also concern that a platform such as Haus might eventually replace real estate agents and brokers. But the Haus co-founder told TechCrunch that most people still need a broker’s expertise for selling and marketing a home, for finding a home, for understanding the true value of a property, and for drawing up all the paperwork.
Co-founder Camp said to TechCrunch, “It just seems more efficient for agents to use a platform to coordinate all of this information automatically.”
Haus isn’t charging anything for the service right now. TechCrunch says that once it understands more about how it can generate income for realtors, it would eventually take a cut from the broker’s fee.
Whether Haus changes the real estate industry like Uber has done to the taxicab world… remains to be seen. We’ll stay tuned.