Kevin Codey’s entrepreneurial streak started early. As a kid, he saved up to buy a DVD converter and charged friends and family to transfer their home movies from VHS. In college he started a maid service before spending years as a real estate developer. Now, he’s rustled up money from a group of supporters he calls “friends, family, and fools” to bring his latest project to launch.
This week he opened the doors to RealtyPerks, his rewards program for homebuyers. It’s a strange concept since one typically buys a home once or twice in their lives. So accumulating points is, uh, pointless. But those one-time events lead to one-time rewards. And they’re very profitable for the brokers who facilitate them, so much so that they spend large wads of cash chasing down clients. And they’re already lining up to use Codey’s platform.
RealtyPerks uses home goods rewards — couches, blenders, TVs, anything one might need for a new home — to lure in clients as they begin their search for a home. The site then matches buyers with brokers and, if a sale happens, the buyer gets points based on the dollar amount of the sale. RealtyPerks redeems the points for users through its relationship with a third party fulfillment broker in Missouri. A $500,000 home might be worthy of a surround sound system for one’s home. The company has 3,000 available items for redemption.
Codey has several hundred realtors ready to buy and, through them, access to a few thousand brokerages, he says. “A lot of realtors are stuck in a marketing model from the 90s,” he says. While sites like Zillow and Trulia go more for ad dollars, RealtyPerks aims to offer real transactions since the site is also a matchmaker. Before he can sign them up, he needs the clients.
RealtyPerks’ target client is a first time home buyer who is used to rewards shopping and discounts in the form of daily deals. “What Groupon did was take a business model and marketing method and apply it to a different industry: local commerce,” he says. “This is a business model and marketing technique applied to real estate.”
The company can afford to have high customer acquisition costs because of how valuable the match is to the brokers on the site and how willing the brokers are to pay, Codey says. He’s currently experimenting with various ways to market to customers and acquire them and will consider seeking outside capital once he settles on a viable cost structure.