Founded in 2015 by Stephen Lane and Tushar Garg, Flyhomes is a full-service brokerage that says it runs with “a start-up mindset.” It first launched with just one agent on board, growing to a team with over 50 members. It currently operates in the Greater Seattle, Portland, San Francisco Bay and Boston areas. According to the company, it has closed 1,500-plus clients with total sales of over $1.2 billion.
“For most people, a home is the single biggest purchase they’ll ever make, and the traditional process of making that purchase is fraught with obstacles, stress and worry. We believe our approach—which supports homebuyers with a vertically integrated product offering—is the future of real estate,” said Garg, Flyhomes CEO and co-founder, in a statement. “Because we do everything from touring homes to funding their purchase, we have greatly simplified the process for buyers.”
How does it work?
While consumers can sell their home using Flyhomes, the company specializes in working with buyers. Instead of a traditional offer, in which an agent submits on behalf of the client for a specific price, Flyhomes actually purchases the home first—closing in under two days—and then sells it for the same price to the client.
Flyhomes prepares everything from appraisals to inspections in advance to ensure a quick closing. If the Flyhomes offer is not accepted, the buyer’s earnest money is returned.
Where is the money to fund these purchases coming from? Flyhomes says it is backed by venture capital firms, allowing the company to pay for homes in cash, as well as providing a 0.75 percent rebate to the buyer from the commission paid by the seller.
Sellers can use Flyhomes’ “Trade Up” option to sell their current home—and the company says it will purchase the property if it doesn’t sell in 90 days, on a mutually agreed-upon price. The buyer would then use the system outlined above to purchase a new home. Sellers in available markets are charged the following commissions: 2.5 percent if located in the Bay Area; and 3 percent in Seattle.
Where do agents fit in?
Flyhomes does hire agents who help consumers throughout the real estate process, but they are salaried rather than working on commission. Flyhomes says it structures its business after “the top brokerage teams.” Each client has a single point of contact during their transaction, but the company also has individual team members assigned to home tours, marketing, transaction coordination, pricing analysis, and more.
Are there concerns?
While having a network of professionals working on behalf of the buyers and sellers can be an advantage, it can also pose communication problems. Flyhomes does provide a central point of contact for each consumer, but if a handful of agents are assisting with the transaction, that leaves room for miscommunications or lost information.
Additionally, as the central point of contact is not typically the agent who shows the house, and the buyer is dealing with numerous agents, it can be harder to build that rapport that leads to a trusted and ongoing relationship between agent and consumer.
Lastly, if two buyers represented by Flyhomes put an offer on the same home, both offers must be the same. Because of this, these buyers are automatically giving up the leverage that a traditional brokerage could offer; instead, they are tied to a number determined by brokerage-wide “pricing team.”
Liz Dominguez is RISMedia’s senior editor. Email her your real estate news ideas at ldominguez@rismedia.com.
