A Cincinnati-based tech startup that is disrupting the traditional way people buy and sell homes has quickly become bigger than some of the region’s largest residential real estate firms.
Homeshake, co-founded by Nick Rabin and Jonathan Bennie, closed its first sale in June 2020. Since then, the company has reached more than $20 million in sales volume in less than two years.
Rabin, CEO of Homeshake, said the momentum is building. The first quarter of 2022 was the company’s best quarter to-date, which is especially impressive considering the first quarter is typically the worst for home sales. Most of the firm’s key metrics are doubling quarter over quarter, including revenue. Homes are selling on Homeshake in about 10 days at 99% of list price.
“We almost can’t bring in inventory fast enough because they are selling so fast,” Rabin said. “As soon as inventory ticks up, we move them into the sold column,” Bennie added.
With a business model that charges a 1% commission compared to the traditional 6% charged by real estate agents, Homeshake has helped its customers save on each transaction since its launch in June 2020.
“Homeshake customers have saved more than $1 million in commissions,” Rabin told me.
Tres Studer, a recent Homeshake customer, said the savings in commission on selling his home were $30,000.
“Homeshake basically gave us the cash to buy a new car,” Studer said.
Homeshake is projecting $2 million in revenue this year, as it approaches $166 million in sales volume on more than 300 home sales. For comparison, the 11th-largest residential real estate firm had less than $170 million in total home sales volume.
Here’s how Homeshake works:
- Sellers list their homes through Homeshake’s free portal
- Potential buyers have access to an exclusive list of homes not available through MLS
- Buyers can send direct messages to the seller through Homeshake’s portal
- Buyers and sellers communicate directly through a special dashboard
- Sellers schedule home viewings at their convenience to show buyers their property
- Buyers make offers directly to sellers through their dashboard
- Homeshake’s software keeps the process organized and simplifies the sale process from contract through closing.
Homeshake is different than the for sale by owner model. The company has a team of licensed real estate attorneys, brokers, photographers and more to assist buyers and sellers through the process.
On a $500,000 home sale, the tradition 6% commission would be $30,000. Homeshake charges a 1% commission, allowing the seller to keep $25,000.
With housing inventory at a record low, Bennie said sellers are coming to Homeshake to save on commission.
“Homes are selling themselves,” Bennie said.
Even though the market is historically strong for sellers, Bennie said the reality is at some point the market will shift. This is expected to provide Homeshake an opportunity to grow even faster on the buyer side, as buyers don’t feel the need to have a real estate agent in more equal markets.
But even in a more balanced market, Bennie said Homeshake’s model is attractive because it saves customers money and gives access to an exclusive supply of homes. The homes listed on Homeshake are not listed on the Cincinnati Multiple Listing Service.
“Your search for a home is not complete unless you’ve searched Homeshake,” Bennie said.
While Homeshake has buyers and sellers across the spectrum, the average sale price is over $500,000. Those that have been through the home buying and selling process before approach it with more confidence, Rabin said.
“Many of our customers have bought or sold in the past,” he said.
Word of mouth is the main driver for Homeshake acquiring new buyers and sellers.
“Our small army of happy sellers and buyers tell their friends and family,” Bennie said. “It’s such a positive and successful experience, they feel compelled to share.”
In the near term, Homeshake’s founders are looking to expand their offering to include Northern Kentucky and southeast Indiana. Today, Homeshake is available in Hamilton, Butler, Warren and Clermont counties.
“We’re contacted every week by prospective customers who want us in their area,” Rabin said.
Bennie said the current team could handle the addition of Northern Kentucky and Indiana without an uptick in staff.
While Bennie and Rabin are focused on the local area for now, and still have room to grow, they see Homeshake as a business that can scale across the U.S.
Homeshake has eight employees today, with the team working remotely and using office space at Union Hall in Over-the-Rhine. Eventually, Bennie and Rabin would like to have their own space, preferably in the urban core. The team likes celebrating closings with its customers and employees.
“Being together in an office space makes those wins even sweeter,” Bennie said. “To have that team together provides a lot of energy.”
