Listing agents and home sellers have traditionally been brought together through referrals, advertising, cold calls and hours of online research. Those systems are outdated and inefficient, says Patrick Armstrong, head of the new Canadian real estate platform Hyyve.
Hyyve, which launched earlier this month, connects homeowners with a network of agents who, through a bidding system, compete against each other for the right to create the property’s listing.
“When we looked at the residential real estate value chain, everything starts with (a) listing,” Armstrong, Hyyve’s CEO and co-founder, told BNN Bloomberg in a Monday interview.
“You can’t sell your home without a listing, agents cannot earn commissions without a listing, and you can’t get onto the MLS (multiple listing service) without a listing, so for us the listing really has value.”
Agents using traditional means of finding listings often struggle to secure solid leads, Armstrong said, adding that returns on their time and capital investment as well as conversion rates are typically low.
“So, we wanted to reimagine how this process starts. What (Hyyve) does is we allow home sellers to post their listing, we’ll call it a pre-listing… and they would put it on the platform and solicit bids from agents,” he explained.
“Agents then come into the platform and there’s two components to this bid; there’s an upfront payment, so how much they are willing to give the homeowner in cash upfront, and more importantly there’s a comprehensive sales plan, so how the agent plans on selling your home”
Armstrong said that because agents are in competition with each other, they are forced to showcase their value upfront in order to be selected, allowing homeowners to find the best agent for them.
“They’re really going to put their best foot forward and bring their A-game to the table. We take all of those bids, and we display it to the home seller in a dashboard where they can really look at these bids and make performance and data driven decisions,” he said.
“(That’s) instead of what traditionally has happened through referrals. Just because your sister sold a home with an agent five years ago doesn’t mean that referral is the best agent or the best agent for you.”
By ensuring that a homeowner finds the best listing agent for them and their situation, it maximizes the chance that the home is sold for the highest price possible, said Armstrong, adding that agents have an additional incentive to sell the home since they made an upfront deposit to the seller.
Armstrong acknowledged that referrals are still an important part of a listing agent’s business but said that Hyyve will allow homeowners to compare a referral to other agent proposals before making a final choice.
“In any sales business, a referral is typically found business, so when a salesperson gets a referral, they don’t necessarily come to the table with all the perks and value and their best foot forward that they would in a competitive environment,” he argued.
“What we’re saying is you can get a referral and then you can use our platform to benchmark that referral against top agents that want to represent you.”
Armstrong said that since launching, Hyyve has delivered on its goal of creating more value for home sellers, while also driving innovation from agents.
“Competition drives better performance, so because agents are now looking and seeing that they are not a referred agent and that they have to earn this business, they’re putting creativity at the forefront and they’re putting more effort into the listing,” he said.
“All that translates into more value for the home seller. We intend on helping the home seller get the best chance to maximize the final sale price of their home.”
