This startup replaces real-estate agents with an app — and says it will save homebuyers lots of money
Reali
Amit Haller is living the American dream. He sold his startup for $42 million in 2006 and became a Bay Area real-estate tycoon. Now he has launched another tech startup taking on the real-estate industry with a new way to buy and sell homes — entirely though an app.
The new company, Reali, came from the experience he and his business partner, Ami Avrahami, had as real-estate investors.
"We bought and sold hundreds of houses and rental properties, and did development from the ground up. We saw many different angles in real estate. I've walked with, and I'm not exaggerating, over 100 different agents," Haller told Business Insider.
These days in the Valley's insane real-estate market, every purchase is a frustrating bidding war that relies too much on the real-estate agents, he says.
"Why does a simple negotiation become so complicated? Our agent needs to negotiate with the other agent, who needs to negotiate with the seller, and many times it's going nowhere, and you never know where the message broke," he said.
He tells the story of his friends who lost out on their dream house because their agent went to a party for a few hours. By the time the agent saw an email from the seller's agent, the seller had already accepted a counteroffer.
And there's no way to tell if you are losing a bid for a relative pittance, Haller says.
"To find the perfect home takes time, and then to lose it by $10,000 to someone else is very frustrating," he said. "If I could just know it would take another $10,000 to win it — that's nothing when Bay Area pricing is $2 million for a home."
So Haller and Avrahami built an app for their own use that would put them in control and move the human real-estate agent into a supporting role. They liked it so much that they released it to the public and launched a company.
Self-service real estate
RealiLots of apps let you browse a home online, and Reali matches them.
However, with Reali, you apply to become a qualified buyer through the app, submitting the documents of your prequalified loan. A person reviews those documents and validates them.
Once you're qualified, you go shopping. If you see something you like, you schedule a tour. The app can unlock the door, so a real-estate agent doesn't have to accompany you. And "info beacons" placed around the home will alert the app to the home's unique features so you don't miss them.
"When I buy a house, I want to be there myself to see it, feel it, sense it. If you have a question, you can click, and someone can answer," Haller said — a person is standing by to answer questions about the property.
If you like the house, you submit your offer through the app, too. You conduct the bidding through it and are informed of counteroffers.
"It's a broker in your pocket," Haller said.
On top of that, Reali charges a flat fee of $2,950 to be the buyer's agent, and reimburses the buyer's agent commission, at closing, of 2.5% minus the fee.
On a $1.7 million home, that rebate would put around $40,000 cash in your pocket, according to Reali. Reali charges 4% commission on houses it lists as the selling agent.
The downside: Reali is currently available only in California, with listings only in the Bay Area. California is the company's first brokerage license. However, the company plans to expand to more cites and states starting in about a year, Haller says.
Here's Reali's promo video to give you a better sense of what working with an app instead of a real-estate agent is like:
http://www.vimeo.com/video/187784136
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