Since the housing bubble burst half a decade ago, residential real estate has been an unsexy industry. As a result, the category has seen limited innovation. Existing giants like Zillow, Trulia, and Redfin have thrived in the home search category, if only by default. But all are nearly a decade old and were built in a pre-mobile world. For the first time in years, there are signs that the tide is turning and that both investors and consumers are once again receptive to new technologies in this space.
Homesnap is a Washington, DC-based startup that is hoping to shake things up for home buyers by offering the first mobile-first solution in the category. The company launched version 2.0 of its point-and-snap home search iOS app at this weekend’s SXSW(i) festival, taking home the Most Disruptive Startup award at the TechCocktail Startup showcase.
[Funny enough, I was elementary school friends with the younger brother of Homesnap’s VP of Product Development, Lou Mintzer. It was Facebook Graph Search and Homesnap that had us catching up at SXSW after nearly 16 years.]
The magic of Homesnap is that it allows users to snap a photograph of any home, anywhere in America, and get property details and financial information about that home, regardless of whether it’s currently listed for sale. It’s the immediacy and inherent magic of the experience that makes it so appealing. Users can get an immediate answer to the question, “What’s the deal with that house?” without even knowing the address.
The company uses a combination of Realtor MLS data, tax records, census data, and mapping data to assemble a detailed catalog of every property in the US. It’s not the first company to collect this data, or even offer similar discovery functionality, but it offers the most magical experience of anyone in the category.
In addition to its location-based “snap” option, the company offers both aerial map- and list-based search within its Explore tab, and a social stream to see what properties your friends and associates have recently viewed in its Activity section. The service combines elements of several well-known products into a single experience. Mintzer likened Homesnap to “Shazam for housing, with a touch of Instagram and Foursquare thrown in for good measure.”
Home discovery is a crowded category, with well-entrenched incumbents. But not all solutions are created equally. According to Mintzer, Zillow is most often cited as its biggest competitor, despite the fact that his company actually has more in common with Redfin. He attributes the disparity in perception to brand recognition, saying that Zillow has the brand everyone in the space covets, while only “plugged-in techies” know or ask about the more powerful Redfin. All three companies hope to become the de facto real estate search solution.
While both Redfin and Homesnap are licensed real estate brokerages, Zillow is not. As a result, the latter doesn’t have access to MLS listing data and instead relies on what’s called “syndicated data,” or a combination of public record data, and data uploaded by property owners and listing agents. This also means that Zillow must make its money through display ads and mortgage lead generation. Both Redfin and Homesnap, can receive commissions on homes purchased through their platform (typically 30 percent of an agent’s commission). Homesnap’s big differentiator is its point-and-snap discovery experience.
Mintzer calls real estate agents “the rock stars of Homesnap,” and the company treats them accordingly by offering free in-app branding through public profiles, client chat, and home recommendations. The company works with several hundred agents nationwide and has driven more than 10,000 qualified leads to these partners thus far in 2013. Also, if agents invite their existing clients into the app, they are not visible to any competing agents.
The real estate search category is also one that is littered with the carcasses of failed companies. Among the most well known are HouseValues.com, HomeGain.com, and RealEstate.com, but any investor and consumer can likely name a handful of other casualties.
Homesnap hopes to stand apart as a mobile-first product, although it offers a Web-product to aid in discovery of the service. Mintzer says to expect an Android version by the end of the month, as the company was sprinting to have it out by SXSW, but decided to hold off on releasing an almost-there product. The company’s iPad app debuted in December to provide more of a leanback experience. Zillow, Redfin, and Trulia each offer mobile apps that enable on-the-go search and discovery. Homesnap has been downloaded more than 400,000 times, and although there are no download figures available for its three biggest challengers, each has tens of millions of monthly unique visitors to their websites, compared to Homesnap’s approximately 4 million.
Homesnap launched initially in Spring 2012 as a product of Sawbuck Realty, then a four-year-old online real estate brokerage. The company has since abandoned the Sawbuck branding and product, turning all of its resources toward Homesnap. The company has raised a total of $5.5 million in venture funding, including a $3.5 million Series A round in August 2012 from by Revolution Ventures and DC real estate investor Robert Stewart.
The early funding was sufficient to get the company of 12 to this point, but if it wants to offer a real challenge to the industry giants, a larger war chest will surely be required. Expect to hear more from Homesnap on the fundraising front later this year.
Although there may not have been a “winner” at this year’s SXSW, the week-long convention was a coming out party of sorts for Homesnap. The company flew all of its 12 employees to Austin as a reward for the long hours they put in leading up to the new version launch. The company also hired street team marketers to hand out thousands of Flavor Flav-style clock lanyards featuring the company’s branding. Company employees handed out business cards that depicted the evolution of real estate search and compared Zillow to a hunched over neanderthal. Homesnap was, of course, a modern human standing fully erect. The campaign may have been tongue and cheek, but receiving the Most Disruptive award was the big payout and validation they had hoped for.
Innovation in this space is inevitable. The only question is whether it will come from an outsider, or whether the current kings can overcome the innovator’s dilemma and disrupt themselves. Mintzer and Homesnap are betting that their ability and willingness to experiment will be more of an advantage than their size will be a disadvantage. They’ve already delivered a bit of magic with the point-and-snap experience. Given the size of the market they’re hoping to steal, they’ll likely need a few more tricks up their sleeve if they are to win it all.