HomeLight Review: A Data-Driven Real Estate Agent Search Engine

July 25, 2016 4 Comments »
HomeLight Review: A Data-Driven Real Estate Agent Search Engine

First let me say this – your real estate agent matters, a lot. They aren’t all the same and performance will vary widely. Do you want your property to fester on the market or sell quickly for a high price?

Obviously the latter, so your search for a real estate agent should be taken very, very seriously. After all, your money is at stake here. And potentially lots of it.

How Do You Choose a Real Estate Agent?

The problem is how do you know who to go with? Do you call the real estate agent offering a reduced commission to save some bucks?

Or a real estate agent who sends you a flyer in the mail? What about the door knocking real estate agent who gives you a Frisbee with their grinning face on it or a company like REXchange?

I suppose it doesn’t really matter the medium as long as you wind up with a competent agent who can get the job done quickly and efficiently.

But as with everything else, a disruptor is attempting to shake up the real estate agent discovery process to help home buyers and sellers connect based on actual performance, not just clever advertising.

HomeLight Uses Data to Pick Your Real Estate Agent

HomeLight

A new company called “HomeLight” is relying on big data (or maybe small data if you think about it) to find you a real estate agent based on your actual wants and needs.

Put simply, they know what is good for you, even if you don’t, though they do need some input from you as well.

First you tell them if you’re buying or selling and choose your property’s location. From there you’ll see a big list of real estate agents that dwindles as you fine-tune your real estate agent search.

I inputted Santa Monica, CA and selling (as opposed to buying) and saw 2,248 agent results with so-called “Top Matches” already displaying the five best fits based on the very limited criteria I entered.

Then you choose a home value, beginning at $910k and under and going all the way up to $5 million plus. I assume this price range varies based on the property’s location. I verified this using Salt Lake City, UT and this is indeed the case.

For SLC, the prices started at $100k or less and went up to $1.5 million or more.

Anyway, once you choose a value range, you select property type, such as condo, townhouse, or single-family home. And from there you’re asked what’s most important to you.

– Has lots of experience
– Gets me the best price
– Spends lots of time with me
– Can sell quickly

If you’re buying, the “can sell quickly” option is removed and you just get the three remaining options above.

Once you get to that point, HomeLight will ask for your contact information in order to give you a list of agents. It’d be nice if you could just see the agents, but nothing is ever that simple, is it?

Once you relinquish your precious details, including name, address, e-mail, and phone number, HomeLight will send over your “personalized agent matches” along with the latest top agent matches as time goes on.

I suppose the list is always in flux because it relies on ever-changing data to rank the real estate agents. If one agent has a particularly good month, it could rise in the rankings. The opposite could also be true.

Once you get their matches, you can view their background, including geographic expertise, recent listings, education, customer reviews, transaction volume, and more.

Additionally, you can see how they rank across a variety of variables to determine their strengths and weaknesses.

It’s probably recommended that you vet each match in person to ensure they’re actually the right fit for you, instead of taking data’s word for it.

HomeLight Data Platform

HomeLight claims its agents sell an average of 23 days faster, and if you’re buying a property, save you an average of $23,000 per home purchase.

How do they do that, you ask? Well, they rely on a lot of publicly available data and some really smart people from schools you may have heard of like MIT, Harvard, and Stanford.

At last glance, they’re analyzing objective data from over 18 million transactions and two million real estate agents.

Then they use “Bayesian statistical models” to determine which real estate agent will get you the best results.

Without getting overly wonky, the Bayesian technique relies on prior probability that is updated using new evidence (data) to come with a hypothesis, which would explain those questions it asks.

The takeaway here is that the final output is an objective list of agent results, as opposed to a list that is sponsored or paid for. Of course, agents do have to pay to play, though they can’t rank higher than others by paying more.

There is no way to “boost” your HomeLight ranking, thankfully. Well, there is, but only through your own genuine efforts as a real estate agent I suppose. There are no tricks or schemes to manipulate the rankings.

The typical real estate finder model relies on who pays the most to get in front of your eyeballs, usually by spending lots of marketing dollars.

The HomeLight model gives you an agent based on pure numbers and performance, which could work out better for both the home seller and buyer. I suppose time will tell if it shakes up the current model.

By the way, if you’re an agent, the cost of HomeLight is a 25% broker-to-broker referral fee if/when you actually close a deal that was gleaned from their platform.

They note that they work on quality over quantity because matches will be harder to come by seeing that they’re actually data-driven, as opposed to just sending you referrals based on what you spend each month on advertising.

But the leads they do send are apparently “serious,” so you may spend less time spinning your wheels as a real estate agent.

Read more: Should I let my friend sell my home?

4 Comments

  1. Melissa Alpert September 14, 2016 at 8:28 am -

    Used this service when we were selling our home in Northridge. Works as advertised.

  2. gil July 19, 2017 at 6:06 pm -

    I personally think this is a very bad thing for starting agents like my self, this app would be ideal for the home buyer/seller, but for brokers and agents this would be very bad especially starting salesperson agents who are trying to build up a reputation because someone who has a good track record will always be chosen by the client over a staring agent, it would be devastating to starting brokers and agents

  3. Brent July 22, 2017 at 11:21 am -

    I’ve been in the Real Estate Profession for over 40 years.

    This service is essentially the electronic web version of building a referral service, for which Brokers have been paying 20-25% for all my years in the business.

    Based on the cost of TV advertising, they are simply passing on to the public whomever does the most business. There is about a 25% amount of truth to this simple presentation.

    The whole truth is, it is merely a third party that has determined a way to use the data to produce income.

    This is no shock to me. Since the late 90’s these so-called geniuses have taken 6% of the amount of a house sale and, without understanding any more than the amount of the number and what it takes, has dreamed up a program to insert themselves into what would happen just as well without them.

    Remember, I gave them an approx 25% estimate of truth to their assumption that people doing the most transactions may do slightly better. I do not believe their numbers are as good as they say or even as good as my own. Most of what they are stating is a matter or “the current hot market”.

    Keep in mind, I get the statistical data every day on my home page on the MLS’s I use, so I have the facts in my face each day and can get very specific.

    I’ve had over 50 Brokers/Agents at once and know better.
    Adding a party, unrelated to the transaction, only reduces the fees the actual Broker/Agent will receive. Then they must split (or pay fees) with their office so they are splitting their time between you and possibly several other clients.

    My advice to buyers/sellers is this – First, make sure you are dealing with a Realtor (means strict code of ethics) because many do not add that because of cost and believe it or not there is no requirement for it. (It is sooo important!) Secondly, review more than one agent because more than anything besides the amount of transactions one does is, how well do you and the agent communicate. Finally, as part of the review of Broker/Agent is the question of how many of which type of transactions have they done in the past year and can they review some of them with you to show results. Then let them do their job! (hint, if they don’t talk to you at least every other day or so in this market there are either problems with the presentability or the price.

    Ciao for now and best to you!

  4. Alex Pavlov September 13, 2017 at 5:55 pm -

    I used Homelight and it works as advertised, but there are several competing companies. A company in Los Angeles already two steps ahead of Zillow and Redfin, it’s called http://itz-sold.com and they offer to sell a house or a condo for 1% listing side commission.

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