With a record market in the Denver metro area, real estate companies are finding fertile ground here for new and expanding businesses.
The month of April saw record average selling prices, a record stock of homes available for sale, and the 2020 market has not failed to beat during the pandemic. It’s easy to see why so many businesses, websites, apps, information services, and brokers are hitting real estate iron here while the fire is burning.
Just 2,600 single-family homes were available in April, down 62% from 2020, according to the Denver Metro Association of Realtors. The average closing price reached $ 623,825, up sharply from $ 120,000 year-over-year.
And speaking of a crowded market for competition, the Colorado Division of Real Estate shows that there are 42,846 licensed agents in the state, up 18% from 35,276 five years ago.
Consider two examples of real estate companies that literally approach the market in two different ways: one from the sellers ‘side, the other from the buyers’ side.
Trelora is an established Denver company celebrating its 10th anniversary this year. It all started with the premise that brokers were getting too many commissions and offering $ 2,500 to anyone who listed a house with the company, regardless of the sale price. He has since increased that fee to $ 3,000. The seller’s commission is typically 5% to 6% of the sale price, which the agent typically shares with the buyer’s agent.
Casa Blanca is a brand new “Bumble or Tinder-like” (swipe right for homes you love) app that launched in the Denver Market in April. It offers a 1% discount to all buyers who use the service. It already has eight agents on board, six more approved and a growing customer base, said co-founder and CEO Hannah Bomze.
Bomze, an experienced New York broker at Compass who grew tired of the “raw culture” of inside agents competing against each other, launched Casa Blanca in New York City in October. Denver is the app’s second-largest market. Parent company HESC Company LLC recently raised $ 2.6 million in funding.
“The name implies a ‘blank slate’ or a fresh start,” Homze said in a video call interview. “We wanted the name to refer to a house, Casa Blanca, but we also wanted to be a clean slate in an industry riddled with toxic practices. We try to offer honesty and transparency.
Trelora CEO Brady Miller, who took over from former CEO and founder Joshua Hunt in 2018, said discount brokerage has grown enough to expand to seven states and 13 markets. He also claims to have saved Colorado customers over $ 62 million in seller commissions over that decade.
“People realize they have options, and the savings are only part of it,” Miller said in a video call interview. “It wouldn’t be worth it if they didn’t get great service as well. In such a competitive market, our exceptional agents are in the top 1% for experience. Our NPS score is unmatched (in the industry), just below Tesla’s. “
A “net promoter score” is an index that measures a customer’s willingness to recommend a company’s products or services.
It wasn’t always like that with Trelora. The company’s flat-rate listing agreements angered Denver-area buying brokers who felt cut off from a commission and often refused to work with Trelora.
If Trelora represents a buyer, he shares the commission with him.
“All are agents are employees,” Miller said. “We do all the normal things a buying real estate agent does… People don’t get it, but when you buy a home, your agent gets paid by the seller. They pay us 3% and we share it with the buyer. The average discount can go up to $ 6,000.
Trelora first established itself in Seattle about four years ago. Although it was only based in Denver, it has expanded up and down the Front Range lineup in recent years and is poised to add an additional 50 to 100 employees next year, Miller said. She recently hired her 100th employee.
In March, the company expanded to five new markets: Atlanta; Charleston, South Carolina; Charlotte, North Carolina; Saint Louis, Missouri; and Tucson, Arizona.
“We anticipate from here, we will grow faster,” he said.
Casa Blanca’s ease of use, hyper-personalized searches, and the discount drew in Denver subway users, Bomze said.
“It was interesting. They are mostly first-time home buyers, most in their 30s, ”she said. “These first-time buyers don’t have a guy. The new generation don’t have an agent, a guy. But they have a brand to connect with. We are the Warby Parker (eyewear app) of real estate.
Bomze said the process aims to provide “more layers of transparency services.”
Users enter all of the generally relevant information such as budget, type of house and number of rooms, but the app also requests items such as hobbies (skier, biker?) And family situation. When they lock in a house, they are logged in to an agent and can send instant messages through the app.
“We clearly identify what interests people,” she said, adding that machine learning about users improves over time.
“In Denver, the people who move there are knowledgeable and educated, which is why we identified Denver,” Bomze said. “It’s a good choice based on our results so far.”
Both offered tips for success in a rapidly changing market. Data from Trelora shows that in March and April, the average listing got 4.4 and 3.7 offers, respectively. Its ads received 83% more offers in April than in April 2020.
“You really have to adjust your expectations when you get to Denver, in terms of expenses and results,” Bomze said. “For example, a buyer who comes to New York or Connecticut, $ 2 million will get you a small two bedroom apartment. In Colorado, you go through the equivalent in the Denver area. But it’s still more affordable, sunnier and a real little-known gem. You need to re-evaluate what the value means. … This is a new goal that Colorado has never seen before.
“The past seven years have been an unprecedented market,” Miller said. “It’s a very difficult market and unlike anything we’ve ever seen. “
Agents at the company saw large deposit checks, unconditional offers, alternative loan options, and hefty over-listing price offers.
“The inventory is so low that’s where agents make their living,” Miller said. “It is the experience of the agent, who knows the market intimately … each district is its own micro-market.”