Since 2003, Dan Green has helped more than 10 million people buy homes. This Cincinnatian started as a mortgage loan officer before founding and selling two mortgage companies. Now, he’s hoping to shake up the industry yet again with a new mortgage platform that targets an overlooked yet lucrative market: first-time homebuyers.
Homebuyer.ai is a mortgage lender targeting first-time homebuyers. This homebuyer niche is growing — Green estimates up to 2.5 million first-time homebuyers could enter the market this year — but they’re often brushed aside by more traditional loan officers. That’s because these homebuyers start the conversations up to six months in advance, yet only one in 1,000 actually close with the lender they contact.
For many loan officers, this time spend isn’t worth it. Most traditional loan officers spend about $400 on ready-to-buy customers — with a one in 1,000 ratio, that’s a lot of time and money lost. Homebuyer.ai is different, though. The startup spends about 50 cents nurturing each lead, which makes the often-neglected first-time homebuyer market a wise investment. In fact, they convert leads into high-value clients that each spend about $8,500.
So how does it work? Homebuyer.ai puts customized content first. The platform nurtures first-time homebuyers with targeted information, newsletters and articles to help them navigate the overwhelming homebuying process. Then, when they’re ready to make a move, Homebuyer.ai is there to help with the mortgage.
But this isn’t your ordinary content funnel. Homebuyer.ai is hyper-targeted; that’s largely why it works. “If you’re looking to buy a condo in OTR, you’ll see different content than a family in the West Side,” he said. “Two people may have the same goal of buying, but they have different home and lifestyle needs.”
While the startup fills a market gap, that’s not its only selling point. Homebuyer.ai is responding to the evolving real estate industry, which — like most industries — is more digital than ever.
“Ten years ago, a first-time home buyer would call the real estate agent first, and that agent would provide a list of homes, and the mortgage process came later,” Green said. “Today, shopping for houses is DIY. When people browse Zillow, they’re not calling real estate agents. More homebuyers are contacting lenders before the realtor.”
Homebuyer.ai’s strategy works. In fact, Green’s innovation landed the OTR-based startup a spot in Techstars Austin’s 12-week business accelerator program. Now, Green is aiming to expand Homebuyer.ai from Ohio into additional states every quarter.
Of course, a global pandemic means business in 2020 is anything but normal. Companies are shuttering. Conferences are canceled. Spring and summer weddings are on hold or scrapped entirely. Should first-time homebuyers wait this out? Green, who’s providing coronavirus-related content through Homebuyer.ai, says the market should be OK.
“First-time homebuyers can exhale, because if there’s one thing I’ve learned, it’s that the government treats housing like the centerpiece of the US economy,” Green said. “You can still buy a house right now because the industry is adapting to remote work. It may take longer to close, and the process is slower, but the government is behind you. This is actually an excellent time to be a first-time homebuyer.”
