Homie, the real estate industry disrupter selling properties in Utah, Arizona, Colorado, Idaho and Nevada, laid off 119 employees this week — 28 percent of its staff — claiming it was struggling in a market bereft of supply.
“Record low inventories have absolutely played a role in this,” Homie co-founder and CEO Johnny Hanna told the Deseret News. “2021 was already an incredibly competitive year and we started out this year with even fewer homes than the same time last year. And it’s even more competitive.”
Hanna told the publication the huge growth in homeowners’ equity amid skyrocketing values of homes also played a role in the cutbacks, as newfound house wealth is reducing worries among sellers about how much they’re paying out in traditional real estate agent contracts, which can run as high as 6% of the home’s sale price.
That would play a big role in affecting Homie’s bottom line, considering it’s business model is based on driving sellers to a service that promises a lower, flat-rate fee on sales of homes.
Founded in 2016, Homie charges just $1,500 to sellers, betting that its low rate and combination of computer software and professional agents and lawyers makes buying and selling a home a more efficient — and easily scaleable — experience.
The company subsequently launched three offshoots — Homie Loans, Homie Title and Homie Insurance — in an effort to create a one-stop-shop for all real estate sales needs.
Since 2018, the company has raised more than $33 million in venture capital to help it grow.
To help compete in a market that has become awash in cash offers for homes, Hanna said his company was now looking to help buyers make bank-backed cash offers — something he claimed is practically required thanks to the amount of competition there is for just about every home that hits the market.
[Deseret News] — Vince DiMiceli