From Housfy to Housell, how the new digital real estate agencies work

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

Platforms such as Housell, Housfy or Propertista break into the business of intermediation with the claim to save the client agency fees and accelerate the sale deadlines of real estate.

During the last 20 years, the power and influence of real estate portals has continued to grow to the point that today the vast majority of property searches start on the Internet and almost all real estate companies have an online presence.

In what has not been so many developments in these years has been in the way of buying and selling a house. At least until now. A new batch of start-ups such as Housell, Housfy or Propertista has entered the real estate business with a different business proposal, focused on bringing transparency and efficiency to a sector that has been digitized very little to date.

"These new digital companies arise because there is a problem, from the high commissions charged by the real estate companies to distrust or the scarce use of technologies by the agencies," explains Tomás Sánchez Colomer, director of Residential Intelligence at CBRE in Spain. "They make available to individuals online tools and services to which they would not otherwise have access, such as appraisal reports, professional photographs or the promotion of the apartment in the main real estate portals," adds Colomer.

COMMISSIONS

The suppression of the agency commissions is its great commercial claim as some of its slogans show: "Everything you need to sell your flat without paying commissions". "Real estate commissions are from the Jurassic". A saving that, according to the case, can get to surpass the 15,000 euros. And is that unlike traditional real estate, which take a commission of around 5% on the final sale price of the home and take care of everything, these platform charge a fixed fee whose amount varies depending on the tasks that the owner wants to assume.

The price of the plans ranges between 900 and 4,000 euros. The cheapest ones range from the valuation of housing and photography to the publication of the advertisement in the main real estate portals. While premium plans ensure the seller filtering and management of visits, legal assistance and accompaniment to the notary.

This payment is made by operation and does not depend on the volume of the transaction: it is the same for a floor of 80,000 euros that for one of 800,000. In addition, services are contracted for a limited period of time, between six months and one year. If after that time the owner has not sold his home, he must pay the amount again. "This makes people who accept our proposal give us the houses at a price that allows us to sell them faster." When paying for a service the commissions disappear and there is no hidden game to try to increase the price, "says the CEO of Housell, Guillermo Llibre.

Founded in January 2017, Housell achieved last year to exceed the thousand homes sold. Behind the start up is Cerberus, one of the largest investment funds in the world, which in November took 100% of its capital by 3.9 million euros. Last year, the proptech signed the former director of Amazon in Spain, François Nuyts, as new counselor.

The reduction of the sale deadlines is another of the tricks that the virtual agencies use to attract clients and flats to their portfolio. "The average time to sell a house in Spain is nine months, while we are able to do it in four and a half," says the CEO of Housell. "Thanks to the data we are able to approximate the valuation of the property very well, once it is for sale we adjust its price to the market, which greatly reduces the certainty of sale", explains the CEO of Housfy, Alberto Bosch. The average period of sale of a flat in Housfy is 60 days, and 36 in Propertista, according to the data that companies publish in their web pages.

In addition to sharing a certain resemblance in the name, Housell and Housfy have a common past, since in both cases they are founded by former directors of the Groupalia discount portal. Llibre was the country manager of the coupon company until December 2013. Bosch, for his part, left the company's address two years later, in 2015.

RESISTANCE

Convincing the owner that he has to pay in advance, regardless of whether the property is sold or not, is the great challenge facing the new intermediation platforms. "We have met a lot of resistance, the reason why we do not grow faster is because the client is not used to paying for a service," says Llibre.

Lorenzo Ritella, CEO and founder of Propertista, the first virtual agency operating in Spain, compares the situation of his company with the one that Airbnb had to go through. "At first nobody was willing to rent their house to strangers and today it is widely accepted by everyone," he says.

"It is very installed in the head of the owners to pay success when they sell a property because it has always been done that way, although when you explain the savings involved in paying in advance, most prefer it," he says. Last year, Propertista sold 190 flats, six times more than in 2017.

The mirror in which all these new online agencies are looking is the British Purplebricks. The proptech (denomination for companies that incorporate technology to the real estate sector) debuted on the stock market in 2015 and is currently valued at 560 million euros. "15% of the floors in United Kingdom are already sold through digital agencies and this data can reach up to 30% in the next two years," says Bosch. Founded in April 2017, Housfy sold 1,010 homes in Spain last year, according to the company, in the top 5 of the largest real estate companies in the country.

The entrepreneur recommends observing what is happening in the islands to anticipate what can happen in Spain. "What happens in the UK is that the less professional agencies have been diluting and the most professional have grown, with 25% of the agencies in Spain selling less than three floors a year," said Bosch. An analysis shared by Llibre, from Housell. "We're not going to make Tecnocasa or Don Piso disappear, but small real estate companies in the big cities," he concludes.

Housfy: more than 1,010 homes sold

The start-up of real estate services founded by Miguel A. Mora, Albert Bosch and Carlos Blanco closed 2018 with more than 1,010 homes sold. A sales figure that places Housfy, say from the company, in the top 5 of the Spanish real estate agencies with a market share of 2% in Madrid and 4% in Barcelona. The average term of sale of the real estate managed by Housfy is 60 days. The company has raised 3.7 million euros since its foundation in April 2017. The last round, announced in September last year, gave entry to the Seaya Ventures fund in its shareholding.

Housell: the 'proptech' owned by Cerberus

This digital real estate agency with just two years of life has set the goal of exceeding in market share to Tecnocasa in 2022. For this, the start up directed by Guillermo Llibre has the support of Cerberus, one of the largest investment vehicles of the world, which in November last year took 100% of its shares. To date, the company has sold more than 1,000 homes through its platform. Housell offers a flat rate, between 700 and 1,500 euros, which covers the entire sale process of the property, from valuation and promotion to legal advice and contracts.

Propertista: the first online real estate

Founded by Lorenzo Ritella, in 2016, Propertista was the first digital real estate company to disembark in Spain. "Since then, other companies have emerged that have helped to make this segment of the market much more known," says the Italian entrepreneur. In 2018, the start up closed 190 operations, compared to 32 of the previous year, proof of the growing acceptance of these proposals among users. The company, which has raised about 300,000 euros to date from public and private investors, has been in 'break even' since July. Now, he plans to expand his business to Italy.

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

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