Long-time entrepreneur Amit Haller was frustrated with the traditional process of buying and selling houses and thought the real estate market was ripe for disruption. So in 2016, he and Ami Avrahami co-founded Reali. Today, the San Mateo-based company helps customers across California with everything from finding the right home to making an offer.
Q: What’s the problem with existing real estate companies?
Amit Haller: The real estate transaction — buying and selling a home — is complicated, stressful and expensive because the industry is very inefficient. It’s a very fragmented industry. There’s the real estate agent, there’s the buyer’s agent, the seller’s agent, escrow, title, insurance, mortgage brokers, inspectors. Each one of them is a different thread in this transaction. They don’t share platforms. They don’t collaborate very well. We, the consumer, pay the price. Our solution is, let’s make it simple, stress-free and affordable.
Q: How do you do that?
AH: We realize that we need to align all the interests, which means real estate agents need to be our employees versus commission-based. All those guys need to be our employees — escrow officers, loan officers, real estate agents. With only one goal in life: customer satisfaction. In order to keep the right quality of service for the consumer and to be able to be profitable and reduce cost to the consumer, we need to do something fundamentally different. That’s where technology comes in. We manage to streamline the process and eliminate inefficiencies. Traditional agents…they spend a lot of time in their cars. Tons of paperwork. We focus those real estate agents. We automate whatever we can. We built a platform and system and technology that eliminate the need for them to go after customers. Basically, customers are coming from the sales department. And they can entirely focus on the real estate transaction.
Q: Walk me through the services that you offer.
AH: We have real estate brokers and agents for when you want to buy or sell a home. But unlike others, we do it at a fraction of the cost. We have a flat fee when you sell a home. Based on a $1 million home, instead of paying us 2.5 percent commission, it’s going to be a $10,000 flat rate. Different homes have different price points. The seller of the home does pay commission to us, but we don’t believe we deserve 2.5 percent, so we give cash back to you. And on average, on a $1 million home, we’re going to cash back like $15,000. Those are the basics.
We have our own mortgage arm and our own escrow company. They talk to each other, they share the same system and technology. So you don’t need to submit your home address five times. Because we are a full-stock company and can look at you as a customer from those different points of view, we can provide you services that other real estate agents can not. As an example, buy before you sell. Buyers need to sell to have enough equity to buy a home. We come in and say we’ll buy the home on your behalf, with our cash. Move in, start to get used to your home, we’ll sell your other home at the right pace, the right price. Once it’s sold, we can move the equity to your new home, we finance it and close the deal. Furthermore, for first-time home buyers, they compete a lot with cash offers here. It used to be a Palo Alto problem or a San Francisco problem. Now it’s an all-over problem. If you’re not coming with cash, you’re out. But we have cash. We can help you. So we will buy the home with cash for you and you can move in and we refinance it.
Q: How do you get the funding?
AH: Being a startup, we’re being funded by venture capitalists, which align with us on the big vision and mission of the company. And we have revenues. But every time you want to disrupt something, someone needs to help you to fund it. The main lead investor is Zeev Ventures and the second largest is Signia Ventures.
Q: Are you profitable?
AH: We are not profitable yet. We are making money.
Q: What’s your background? Are you a real estate guy or a tech guy or both?
AH: Both. I’m almost 30 years an entrepreneur. I started in high tech — wireless communication and semi-conductors. In 2008, I thought, I’m going to become a real estate investor and retire. So real estate investment went very well because it was 2008. Retirement went very poorly because, as an entrepreneur, you start to have a desire to fix everything in real estate.
Q: In the past few years, a lot of tech companies focused on real estate have launched in the Bay Area. Are you worried?
AH: No, we are not worried. One thing about real estate is that pretty much anything real estate-related is so enormous that there is not going to be a winner take all. If anything, it’s a good thing because we help each other educate the market that there is a different way to do real estate. The current system, it’s about 110 years old. It’s about to be changed.
Also published on Medium.