Realistic Real Estate | Johnny Hanna from Homie

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Johnny Hanna 0:00
It was so confusing where you just were, like, what should be part of the American dream was such a nightmare. And it was like, I just want to be done with this and move into my home or I just want to be done with this and just finally sell this thing.

Alexander Ferguson 0:20
Welcome, everyone to UpTech Report. This is our Applied Tech series. UpTech Report is sponsored by TeraLeap. Learn how to leverage the power of video at teraleap.io. My guest today is Johnny Hannah, who’s based in Mapleton, Utah. He’s the CEO and co founder of homie Welcome, John, good to have you on. Hey, I’m glad to be here. Absolutely. Now your product is a real estate platform that is focused for buying and selling a home along with getting loans, titles, and home insurance. So those out there if you’re in Arizona, Utah, Nevada, Colorado, and Idaho and those markets, which is where you guys are based and serving, and you’re looking to buy or sell, this might be an intriguing platform for you to check out on your site. Johnny’s state, homey was founded with a belief that the use of modern technology and the expertise of licensed professionals is the way of real estate in the future. Our goal is to save each customer 1000 in the real estate transaction, while simplifying the process, some nice marketing material out there, but I feel like there’s some nuggets in there. So help me understand what was the problem that you initially saw and saw set out to solve with homie

Johnny Hanna 1:26
I think my experience in buying and selling homes largely led me to start homey and, and, and asking other people their experience in buying and selling. And it was very similar to mine, just that, you know that the process was pretty clunky, that the people that we used were typically family members, friends that had licenses and, and the relationships were great, you know, I don’t think anybody really had a bad thing to say about their friend, their realtor. But what they did have to say about about it is when they went to the closing table, and they recognized they were paying 6% in commissions, they were paying, you know, another couple percent on the loan, they were paying another percent in title fees. And it was just you know, is adding up. And it was just confusing, it was so confusing, where you just were, like, what should be part of the American dream was such a nightmare. And it was like, I just want to be done with this and move into my home or I just want to be done with this and just finally sell this thing. And like that, that that shouldn’t happen. And that’s where we knew that we can make it better, we can make it simpler, more affordable. We could we could make homeownership more accessible. I came from the apartment industry. And, you know, just a lot of people were told you shouldn’t buy a home, unless you’re going to live there for several years because of all the fees, because you need your home to appreciate in value enough to then cover all the fees you’re going to pay. And that that’s that’s just crazy to me. And rent is normally higher than a mortgage payment. So we thought if we could get rid of a lot of these fees streamline the process, more people would be able to buy and pay less than they would in renting a home and gain equity that they could actually keep and not give away. So all of those frustrations I still feel in half. Um, but yeah, well, yeah, we’ve been able to save consumers about $90 million in in transaction costs on top of making it what we feel is a much better experience. And one of the

Alexander Ferguson 3:39
foundations, which we’ll dig into in a little bit is the fact that you do a flat fee versus higher percentage and etc. And I’m intrigued to dig into this, but it’s this underlying concept of how can technology and software and services software itself be used to streamline things that should be simpler and easier to use? Now, this how you started five years ago, right? So if we could if you could share one thing that you wish you had known when you began five years ago? What would you say?

Johnny Hanna 4:13
You know, I I think I the way that we we grew the business, we really just wanted to be disruptors and do everything different than what the traditional world look like. And we pushed too far. I pushed too far. And had had I done a better job of analyzing what worked instead of letting my pride get in the way and be like, Nope, that’s broken. And it is broken. But that doesn’t mean that like you could just shift things. Everything Oh, yeah, like all at once doesn’t really work. And so we caused ourselves ourselves a lot of pain. We caused our clients a lot of pain. We caused our competitors, a lot of pain. And it was unnecessary pain for all of those situations where I don’t think we would have created As many enemies had I not been as strong to wanting to just change things out of the gate. You know, I think we could have been a little bit more wise in our approach. I know I could have.

Alexander Ferguson 5:13
It’s that, of course, taught by hindsight, but is that knowledge if you want to change everything, but you have to change it, maybe a little bit, piece by piece, or more focused trajectory. Now, I’m excited to dig into more of those lessons learned, stick around for part two of our discussion of Johnny, where we’re gonna be digging more into that. But let’s come back to homing the technology itself. How did it how did it start? How does it work? And how does that maybe the technology has changed over the years? based off what you just said, right there? Yeah, I think

Johnny Hanna 5:41
a couple of the pieces of our software that we built early on, we don’t really use anymore. So we scrapped some of that early software, we wanted it just to be a peer to peer platform where, if you’re buying a home, you could just make an offer online, because all of the homes are now available. They’re all accessible to the general public. And And that tool is great. Just society isn’t quite there yet, like you do. You still need data, you still need hand holding. It’s an emotional process. So we were trying to remove the agent 100%. And the truth is having somebody having a professional to guide you, as you read our mission, like having a licensed professional, that that’s competent, that sold and bought, you know, homes, in their experience in your neighborhood, like that is that is helpful. And it’s needed. I do. Yeah, I so we so we did, we did a big shift. And now Now it’s high tech with high touch. We didn’t have that high touch, we had almost no touch to begin, it was just tech, you know, it was a really cold process where people were still like, well, but what do I do here? You know, it’s not like I buy homes every day. I do it once every five, six years. Some people were really comfortable using it. We had clients that just went on and bought homes to our platform were like, yeah, it works. And it was great, in terms of in terms of really disrupting this industry, and helping the masses save money and have a better process. It wasn’t built up correctly from the get go.

Alexander Ferguson 7:20
Gotcha. So for those, you realize the majority, maybe the early adopters that love technology, yeah, they jump on and use this, but for the majority, early majority, late majority, depending on you look at that, that curve, they still want and desire a handhold high touch and so you brought back in the real estate agents. Now how does that work? Where it’s, it’s used as a flat fee, but you have a real estate agent?

Johnny Hanna 7:44
Yeah, it’s worked really well. It’s actually extremely beneficial for realtors. So we’re attracting Realtors left and right were at the beginning, you know, it was more, we were in opposition. Um, but if you know the statistics of the traditional real estate industry, it takes about three weeks data license. And because of that there are 10s of 1000s of agents in every major market. So competition is insane. It’s really hard. So in all of our networks, we all have two to three friends or family members that are real estate agents. And the problem is like, Well, which one do we use, and they’re all vying, you know, they might take you to the latest Star Wars movie or whatever the whatever the preferred way of like reminding you that they’re a realtor. It was, it’s so cutthroat. And the average agent only sells three to four homes a year. So if you lose that one home to some another friend or family member, that’s a real estate agent, you know, that takes your, your person away, like you lose a quarter, or a third of your income from being a realtor. So it’s just so difficult and that also creates the need to kind of push your friends and family and constantly be in front of them, and maybe even push people to buy a home when they’re not ready for it or buy a more expensive home. So all of those problems we’ve gotten rid of as realtors have joined homie, we have this platform. We have a full on marketing engine, where most realtors are just 1099 contractors, they have no marketing team, they take your home and stick it on the MLS and that’s it, you know, and it works you know in home sell. But the problem is you can’t get leads you can’t get buyers for your home that your listing as well as homie does because of this marketing engine. So because of that we bring in leads left and right so our Realtors don’t have to cold call all their friends and family. They can do you know, up to 10 deals a month instead of two to three deals a year. You know, so it’s in there. They’re more experienced because of it. They have more expertise doing more transactions. They get paid less per home because of it. So it is more of a flat fee. So it’s more in volume, but the there’s less pressure on their friends and family that use them, they can now offer their friends and family savings. And they can say, hey, look, you can go with your cousin, if you don’t want to use me, that’s fine. Because I’m not going to lose, I’m not going to miss a car payment, my house payment because you didn’t use me. So that’s where the benefit is.

Alexander Ferguson 10:23
So it was it’s a shift for real estate agents on how they may think and play a role. Now for those real estate agents, maybe they’re doing very well. They’ve got their systems, they this might not be of interest to them. But for those that are in it, but aren’t, don’t have that marketing engine or ability to do it, this type of option might make sense. And then it also benefits the end consumer buying because they still have that high touch experience sounds like but to the benefit of the marketing engine it comes in? That’s

Johnny Hanna 10:51
right. Yeah, there are great realtors out there that already have big systems in place super intelligent. Their businesses are going really well. And yeah, they don’t have need, they will eventually need to compete on price. But yeah, I wouldn’t say their services is less than ours. I think there’s some realtors out there that offer amazing service. So even me saying that is different than what I used to say back in the day. So

Alexander Ferguson 11:15
it sounds like you were definitely very bullish into saying, All you real estate and the people are terrible. You don’t go away and

Johnny Hanna 11:22
everyone’s everyone’s wasting money. Yeah, like, it’s never worth it. You know? And that’s not true. So

Alexander Ferguson 11:30
I’m gonna play a little bit of kind of hardball. You’re a devil’s advocate. Okay, what you versus other technology. I mean, this has been a growing trend for the whole industry to use technology in real estate. So tell me a bit more about how you guys are different or your perspective compared to other options out there?

Johnny Hanna 11:48
Yeah, I mean, one of the things we’ve done is we’ve added loans, we’ve added title, we’ve added insurance. So being a one stop shop is huge. So we’re not just saving people money on the real estate side, we’re saving people on loans all the way through the whole process. So and then just having one company to work with. It’s, it’s been easier to streamline than telling, you know, some realtor saying, Oh, I got a buddy that works at this mortgage company, and another buddy over this title company and like, we’re really good friends. So it’ll be smooth, but it’s, there’s actually separate companies separate processes like it’s, it can be a pain. There are a couple big companies that are gaining a lot of notoriety, Zillow, Zillow is amazing. I love Zillow. I’m a fan of Zillow, but they’re their competitor. And what they’re doing is they’re, they’re buying homes outright from you, like they’re buying them for cash. And so in doing that, they charge upwards, you know, of 13 14% Commission open door has that on their website, they charge I think, seven to 13% Commission, not six. So they’re going the other direction, and consumers just don’t do math. That’s what we’ve seen. So like, you know, homes right now have appreciated across the US significantly over the last few years, especially during COVID, which is crazy in a lot of markets. But yeah, I mean, you may have bought your home for 250,000. It’s now worth 350. In your in someone’s like, yeah, offer you cash, like great, that’s awesome, but you don’t realize it was worth 350. And somebody comes in with 10% Commission, and takes all that equity from you. And you could have sold it in the same timeframe with a company like homie. And there are competitors like us that offer really good deals, sell it in the same timeframe and you just end up with 1020 grand more in your bank account. So the built the sales pitch of buying it for cash, and making it easy, sounds great, where you don’t have to show your home or stage it, but you’re giving away all of your earnings and and people to start looking at that. So walk

Alexander Ferguson 13:57
me through just a typical experience that someone would have of saying, Okay, I’m ready to sell my home. What does that

Johnny Hanna 14:03
process look like? Yes, selling is really interesting. It’s different than our biocide process, but selling a home, you go online and you’re in church, and we try to empower our consumers with tech and data. So the client just clicks list your home and you start filling out your information and say everything about your home and you hit enter you know, and then you’re immediately connected with one of our Realtors. A yard sign is automatically shipped to your home a photography company is put in touch with you. So all of those things are just automated where you schedule the time of when you’re ready for the photoshoot. You know the yard sign is installed. A lockbox is meant is sent to you and installed as well. And then once the photography comes back, you’re notified that photography is done. You can then log back into our dashboard and look at the photos and choose which ones you want to keep which ones you don’t If you want to rearrange them, and you’re given a pricing analysis, you’re given assistance from our people who do 1000s of transactions a year, not a realtor who does two to three. So again, like the pricing analysis is really strong. And you’re given tips and tricks like if you want to start low and create a bidding war, you can do that, you know, and so you’re given advice. And then your home is published and we have an auto tool that automatically publishes it on all the major websites, Zillow, the MLS, homie, all the major sites across the US and and then from there, tours start coming in, you get notified of when tours are occurring via the app. And when an offer comes through, then your realtor is notified of any offers and they walk you through it. And then you know, help you go to homie title to close on your sale. So it’s, it’s just a, it’s a really simple process, it’s not much different than what you’re used to, in selling. And then the buy side is is also similar like most people find the home on their own. And then tell the realtor friend which home to go and see, our app allows you to do the same thing. You can see all the homes, you schedule a tour, your realtor, meet you there, unlock the door and walk you through tell you about it, help you you know, recognize if you can afford the home, you can get pre qualified through homie loans. And you just have so much assisted you have all these professionals within our company to help you. So that’s that’s the process, what would you say

Alexander Ferguson 16:30
is as far as the consumers that you’ve heard from is the biggest aha moment of the problem or just their their experience of how they’ve felt about it.

Johnny Hanna 16:40
Um, I think the biggest aha moment is that you still get a dedicated realtor that’s on call 24/7. Like, our our Realtors are amazing, they work hard for their clients. Um, and I think they’re, they’re shocked that they have full service, you know, paying what they’re paying, they’re like, you know, how do you make money? You know, I know that we’re getting such a good deal. But we make money through the loans through title through all these other products. And that allows us to do such a lower fee for the consumer to help them save money. So I would say that’s, that’s the biggest aha moment along with like, the feedback of saying, Yeah, I didn’t feel pressured at all. And, you know, I remember one client calling me up and saying, Hey, like, I searched for, like, 30 homes and your realtor was amazing. We made an offer, we found our dream home, but then at the last minute, I tricked him. And I’m like, hey, you know what, I don’t want this home, I want to back out. And he’s like, I wanted to see his response. And he was like, great, you know, like, if you feel some fatigue of searching for homes, you know, we can take some time off, then just let me know when you want to go back out. You know, and, and, and that client was like, Man, I couldn’t believe he was so kind and patient. I take you know, I made him go on 30 tours, you know, and, and then he was just willing to drop it after he had negotiated and gotten me this home. So that’s what I mean, I’m, I’m blown away at the quality of amazing realtors that have joined our team.

Alexander Ferguson 18:14
What, how big is the team today? Because you crossed those 512345 markets, right that you’re in right now?

Johnny Hanna 18:26
Yeah, we’re about I think close about 350 people, we plan this year to be at about 1000. So we’re growing incredibly quick. So we’re hiring realtors in every one of those markets. And and I think you know, once once we do that here this year, we’re planning on on a nationwide launch to hit

Alexander Ferguson 18:46
my next question as far as opening up to other markets. What does that look like?

Johnny Hanna 18:51
Yeah, it’s it’s just a matter of really nailing these five states getting good traction, hiring, really quality realtors, and then moving on from there. So we’ll do another round of funding, we’ve raised about 50 million today. We plan on on raising a monster round here next and really going, going getting aggressive in launching more of the major metros nationwide.

Alexander Ferguson 19:12
What is the most exciting feature that you just launched? Or is coming up that you would want to share for people to know about?

Johnny Hanna 19:19
You know, I? Yeah, I think everybody’s compared themselves, you know, to the Uber of real estate, you know, the Lyft you know, all those different technologies and I think consumer choice is so important. And as you go to tour homes, you know, just signing up with homie, we may not be your cousin agent that you know. And so we’re building out a tool where you can select your agent read up about them, you know, see their reviews, see their interests, their hobbies, you know, see if they’re going to be a match and then as you’re touring homes, you know, you can you can see how far away these agents are and you know, kind of you know, like, like the Uber car you know, going to the actual home There’s some, there’s some really fun technology there that doesn’t exist that I think you can, you can piece that in to the home buying experience. So, I’ve been excited about a lot of those tools. But honestly that there’s there’s some basic things that we’re still building, we still have so much work to do that I’m like, Ah, you know, if the list is a mile long, so some of those really cool features, you know, are coming. And but there’s, there’s other items that our clients are clamoring for just to, just to make it simpler just to search. So we have a great development team that I’m proud of,

Alexander Ferguson 20:36
what what can you share, then, just kind of your your roadmap of five years from now? What is it going to look like? What can people expect from me?

Johnny Hanna 20:44
I think having, again, empowering the consumer with as much data as possible, so that transparency of the agents, who they are, how many deals they’ve done, that hasn’t really existed within your own friend network, like, you may have a cousin that has a real estate license, but they may have done zero transactions, you know, and, and you don’t know that because they might be part of a team. And they might be like, oh, yeah, I close deals all the time. But as a member of a team, they’re only doing like, a small portion of the deal, it wasn’t really their transaction. So seeing that visibility is great, but the data, if you could log in and see all of the homes, what they’re priced at what they, you know, like the percentage increase in price that’s grown over the years, if you can see the recent homes that have sold, if closing costs were covered, or if half of closing costs were covered, like what negotiations occurred in that home, you know, the slope of the driveway, the where it’s facing, if it’s facing, you know, toward the east, is this sudden gonna melt the driveway, you know, if there’s snow, like, if there’s a slightly higher elevation to where your views are better over the valley, if you’re in a mountainous region, you know, like, or if you’re up on a hill, looking over the ocean, like, all of that data, should be able to add dollars or remove dollars from the price of the home. And just having that information would give you as the buyer, a really clear view of what you should offer for the home. And then if there’s, if there’s, you know, advice in tweaks of like, look, when you make an offer, you’re going to be able to come back and negotiate after the appraisal comes in. If the appraisal comes in low your offer, you could you know, you could offer 50 grand higher, and then come back and say, hey, the appraisal came in low, I want to offer the appraised value. So like there’s tips and tricks, that having a professional is great right now. Because those tools don’t exist online. And then even when they exist online, I think still having, you know, a dedicated agent that you could reach out to at any time or chat on the on the computer, you know, like that’s that’s how I I foresee it just I do think there’s going to be more interact interaction between the buyer and the seller, with them both having assistance but not being forced to have such high touch.

Alexander Ferguson 23:10
Well, thank you so much for sharing the vision where you’re headed. And I fully believe that the the the culmination of data into an easy, streamlined process is going to change the face of real estate. But it’s a fascinating combination of high touch with the software for streamline that I’m intrigued with where you guys are going. For those that want to learn more if definitely if you’re in those industries or markets where they are right now. Or soon to be many more. You can go to homie.com. That’s homie.com. And, what’s the first good step for them to check out? You probably can just start searching by homes or they can start the process on the right. Yeah,

Johnny Hanna 23:47
I think even if even if you’re not looking to buy a home, it’s always fun to check out home. So yeah, just searching through them in all of our clients listings. We do the 3d Matterport tours where it looks like a dollhouse and you can go in and see everything. Like, that’s just fun, you know, especially for people who have staged their homes. For people that haven’t staged their homes. That’s still kind of fun. You can see like, oh, you know, they, they need to paint this room a little different color. I don’t know. I mean, you can get creative and maybe go buy that home and then flip it. But yeah, it’s out there. Searching is always is always fun.

Alexander Ferguson 24:21
And a whole process of real estate is can be a very entertaining process when it’s simplified and makes it easier which technology can do that. Thank you so much for sharing your time. Stick around for part two of our discussion, we’ll hear more of Johnny’s experience lessons learned and the founding journey on part two of our interview apptech again is sponsored by tarab TeraLeap. Learn how to leverage the power of video at teraleap.io Thanks, everyone, and we’ll see you next time. That concludes the audio version of this episode. To see the original and more visit our UpTech Report YouTube channel. If you know a tech company, we should interview you can nominate them at UpTech report.com or if you just prefer to listen, make sure you’re subscribed to this series on it. Apple podcasts Spotify or your favorite podcasting app