Real estate is the No. 1 industry in the American economy, with residential home sales as its largest segment. But unlike other industries such as travel and insurance, there hasn’t been as much innovation or disruption to the residential real estate market.
A company in Cincinnati is hoping to be a disruptor.
Homeshake, founded by Nick Rabin, offers a digital product that simplifies a real estate transaction from start to finish. Cincinnati Future spoke to Rabin about what the company does and how he sees it growing.
What was the impetus behind the launch of Homeshake?
Rabin: Buying or selling a home should be as easy as buying or selling car insurance or a vacation. So we were first to market with a peer-to-peer home sales platform. Homeshake provides the tools and support for people to complete a home sale from start to finish.
We built the company on a very simple premise: zero commissions. We felt like removing the friction from the home sales experience was very important, and improving the experience was something that needed to happen.
What is the technology you use?
Rabin: Our product itself simplifies the transaction from start to finish, so a seller can claim, market and sell their home in just a few clicks. Our solution lets buyers search, tour and communicate directly with sellers. They can make an offer and follow that all the way through closing on our exchange platform. We like to say that we’re offering a paradigm shift in real estate. The ability for buyers and sellers to complete a transaction on one platform is revolutionary.
How did the company come about?
Rabin: We are very much a Cincinnati story. Our earliest days were all about brainstorming. During the first half of 2019, we poked at the problem and worked on a solution with Cintrifuse. We then moved into space at the University of Cincinnati 1819 Innovation Hub, where we’re working with some very talented people and companies throughout Cincinnati. All of our team is from here. Our partners, from marketing to technology, are part of the Cincinnati ecosystem.
How does your platform save time and money?
Rabin: Homeshake provides on-demand service and support from a team of professionals, including real estate attorneys. A typical Homeshake deal requires low human capital — 3-5 hours per transaction versus 35-100 hours for traditional agents. The revenue model includes a success fee for both parties and integration of the title, closing [process] and other verticals. The average revenue of $3,800 per transaction includes the title and closing, with white space for much more.
Homeshake currently operates in a market footprint of 25,000 transactions per year. As of the second quarter of 2021, our company has over $10M in transaction volume, at an average sales price that is 2.5 times higher than the local market average. This indicates an appetite among confident consumers for a solution that simplifies the process while saving them money.
What’s different about your platform?
Rabin: At any given time, only 1% of total home inventory is listed for sale on the Multiple Listing Service (MLS). To gain supply advantage, Homeshake focuses on the other 99%. This ‘unlisted’ inventory includes coming-soon homes, private sales, for sale by owner (FSBO), pocket listings and more.
A new marketplace of homes that are essentially unlisted but whose owners are willing to sell – the market before the market – is exponentially bigger than the MLS. Homeowners have more control and flexibility, and buyers gain exclusive access to additional homes for sale.
What are the advantages of being located in Cincinnati?
Rabin: The Cincinnati ecosystem is under appreciated. It’s been an excellent place to start and grow a technology company because the ecosystem has been very supportive. We’re very proud to have been founded in Cincinnati.
What are the next steps?
Rabin: Our next step in terms of growth would be regional strategic markets. Following that, certainly our plan for the company is to be coast to coast. So far, our funding has been angel. We’re moving into our seed stage now with three objectives: to hire talent, expand geographically and accelerate product development.