How COVID Changed Open Houses and Real Estate Marketing with HomeSpotter CEO

Brokerage Insider

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At the nexus of brokerage mobile apps, real estate marketing, and open houses sits HomeSpotter's CEO. The company offers branded apps for brokerages and agents, automated listing marketing, and the number one open house registration app, Spacio.

Aaron had a front row seat to what would go from the shut down of the real estate industry, to it's holding up the rest of the economy. We ask him about this and he provides some tricks that brokerages can use for their apps and marketing.

TRANSCRIPT

Hi everybody. And welcome to Brokerage Insider the podcast where we interview the leaders in real estate and technology. I'm your host, Eric Stegemann and I'm the CEO of TRIBUS. We're one of the largest independent prop tech companies in real estate and provider of custom brokerage technology to medium and large sized brokerages in the United States and Canada.

Today on the show, I'm looking to have my friend Aaron Kardell. Aaron is the founder and CEO of HomeSpotter. HomeSpotter started out. As the premier provider of branded apps for brokerages and agents, but the company has recently branched out over the past few years into other options as well. And we'll dive into some of those when we talk to Aaron today.

So Aaron, thanks so much for joining us. Thanks for having me, Eric. Great to be here. Good to talk to you. In fact, right before we started recording here, we were talking about how it's the, as we're recording this today on March the ninth, 2021, I think it's the oneumyear anniversary of the last time we all saw each other at the leading area conference in Las Vegas, right?

It's a, it's been quite a year. Yeah, definitely. Definitely. And, and, with what you guys do, it'll be interesting to hear some of the data, that you have of what you've seen over the past year. Cause you're kind of a leading edge. in some regards for, for that data. So I'm excited to dig in. but before we do that, I just want to understand a little bit about your background.

let's start out by, you know, you're obviously a technical founder, so what got you started to doing software development and then later starting your own company. Yeah, thanks, Eric. well, real simply, I grew up in a rural community in Nebraska. and this was, back in the days when, computers were still.

Lunchables as they called them at the time they were briefcases. and, my parents were entrepreneurs and my mom, happened to be an accountant at the firm that they had founded. And so she would. Drag this, briefcase home, with her each evening. And, at a very young age, I picked up a book about, basic, programming and, learned, programming at a very early age that way.

And just, you know, I think was really excited by the concept of. you know, you put in a program and, minutes later, what, what you wrote is, is working and, you know, over time, There was kind of that personal joy in, in learning programming, but having parents who were entrepreneurs as well, led me down a path where, you know, as soon I started exploring, what does it look like to combine these two things to, potentially start a business, that, that was also within the, the rental of software.

And so by, Time. I was in high school. I, started my first, mini little software company that was selling, what, was referred to it at. The time has shareware, over the internet. it was a windows program. And, you know, as I say, sometimes it was, you know, not a ton of money as far as, tech startups go nowadays.

But, compared to, working at the local dairy queen. It was a pretty good, pretty good living for a, high school kid. No, I have not heard the term shareware in a very long time, but it brought lots of memories back of the software of the month club discs that I used to get. Yeah, I have to ask you, what was the, what was the shareware app that you built?

It's so random. I got to tell you, the name of the, windows app was called easy zip self extractor pro. and there was only a pro edition of course, but, you know, the idea was, and this sounds, almost insane in retrospect is a lot of people didn't know how to open a zip file, back in the day.

And so. These, programs like the one I created allowed you to convert a zip file into a exe file, you know, something you'd run. And so people could transform their zip file into a program that they could send to somebody else. And at the time people would just, Trust that and run what they were sent.

but, yeah, so it was a, it was a good little business in, a certain niche. So WinZip was your big competitor then, right? They were, yeah, WinZip was a, you know, more kind of the full suite of, being able to manage those zip files. And they, they did have their own little, self extractor program.

but yeah, they were, they were our big competitors. That's so funny. I think some people listening into this, that's gonna, it's going to bring back a lot of memories thinking about both shareware and WinZip, and, and the old ways of zipping files where it wasn't just a right click. Like it is today.

There was a lot more complicated, 20 something years ago, folks. so, but that begs the question. How do we go from zipping files, to real estate software development. Yeah, well, between that and, founding, what's now HomeSpotter, I had a few, other startups along the way, spent a fair amount of time in Kum12 education.

had, Company that had a student information system that was sold to a Pearson education. And I worked there for awhile. and, it was a lot, a lot of great time. and, then, you know, right around 2009 after I had left Pearson, I had just gotten into iPhone development personally and, was something I was personally excited with.

And I had an experience where my wife and I were looking for the next house, where we wanted to live. And driving around on the weekends, just felt like a very empty experience on an iPhone at the time. couldn't figure out, you know, why can't I see what open houses are open right now. and you know, I certainly had the experience on some brokerage websites prior to that of a good experience on the desktop.

but there just wasn't. A good moral equivalent of that on, on the phone and yeah, and even in 2009, at least when this idea really got started, this was before, realtor.com or Zillow or others like it, even had an iPhone app yet. And so really just, you know, out of a personal experience, a need, that's what led to starting what was at the time, mobile Realty apps and is now rebranded HomeSpotter.

And I. Real quick. very, very quickly learned that, kind of the way into the industry was through, IDs rules, which I learned about and partnering with brokerage firms. And that's what led us down a path of a white labeled app business for, brokerage firms, that they could basically have a mobile app to compliment their, their website.

Well, yeah. And, it's now. I think the number one provider of those, after, another company that was out there got acquired a couple of years ago. You're you're the, you're the big dog now, right? Yeah, we, we are now in the market leading position in, in that, space. Yes, that's great. but the, you know, obviously there's the concern that, that brokers have.

And, and I take calls like this from concerned brokers, saying, you know, Oh, well just everybody uses Redfin or everybody uses Zillow. Why do I need. an app they might say, or, or in the calls that I take it's why do I need IDX on my website? you know, everybody just goes to Redfin. Anyways, what would you say to, to brokers that, that are having those thoughts?

You know, I think the big thing I would say Eric is, there can be different tools for different stages of the transaction. And, one of the, one of the biggest things that we found is that, our apps have been a great way for agents to really, nurture many of the relationships that they have and, convert maybe some of the ones that are only.

passively looking into more of an actively buying mode. And we do find a number of scenarios even where agents might be, buying leads from the likes of Zillow, where ultimately they get, one of our apps in there. now client's hands. It, it's a great means for, collaboration, during the transaction.

And it's also a kind of a great way to stay in touch even in those times where. that a potential buyer isn't yet in an actively buying mode. we've also found that, brokerages that have a lot of traffic on their IDX websites, are. Really in the best position, if they want to use our apps as a primary means of lead generation, not just for that nurturing that they can, use their, mobile web traffic, which they've already got a great presence with, to, to push downloads of the app as well.

And that makes a lot of sense. It's, it's almost like the, the positioning, isn't the discovery, it's the connection side of it with, with the, with the agent. Right. so you know, something that I've been really interested in and paying a lot more attention to recently is, is push notifications. And, you know, for the brokers out there that are listening, if you're not aware of what TCPA is.

You should probably look into the telephone consumer protection act because there's all sorts of rules around your agents and your responsibilities with regard to sending text messages to folks, particularly when it comes to marketing text messages, if they haven't opted in, but, but push notifications are kind of the wild West.

there's no restrictions behind the, because it's a sheer data connection. It's not going over the telephone network. how important have you seen. Those push notifications be to create a engagement with your apps. Yeah, I can, I can say that it's an area we've done a lot more in over the last, year or so and building in, prompts to, deliver push notifications around things like, listing alerts, say when you've saved a property, if the price changes or, if you've got to save search, letting the consumer know that there are matching properties.

or, you know, another way we've used push notifications for a long time is really with this built in messaging and collaboration component to, foster communication. And when somebody sends someone else a message to, send a push notification to get them back into the app. And it's a, it's a huge driver.

we've seen, Over the last year, really a 25% year over year increase in, something that we track called the Dow Mau ratio and Damo is a daily active users to, monthly active users. And, you know, we've seen a 25% lift over the last year in that down mal ratio. too. Very high levels.

And a lot of that is really driven by these push notifications. That's phenomenal. I mean, in the app world, Dow and Mao is, is, is everything. it's out. If you're a mobile app developer, it's how your entire app gets valued is based upon daily active users and monthly active users. And, obviously from a brokerage perspective, being able to push those numbers up to their apps, with little things like this that may not even have costs associated with them from the broker standpoint.

it, it seems like it's everything. It's, what's going to connect them with their agent versus going over and using that Redfin app, that they don't have a personalized connection with. Right. Indeed indeed to yeah. Great way to continue that engagement over time. Yeah, for sure. For sure. You constantly stay on their phone.

I mean, I mean, I know a broker who has an app and they're not only pushing out through push notifications, you know, updates to their, to the listings that somebody may be subscribed to, but also general information about, buying a home, selling a home, almost using it like a, Like a, a drip message.

That's in a push notification and they're seeing great engagement with that. also their mortgage division is using the app to push out notifications saying, Hey, now, you know, you, you bought a home from us last year. and your rate was 3.125. We can now refi you and do a courtesy refi because you're a client of.

Of this brokerage for 2.75, you know, we act now before rates go up and that inumhouse mortgage operation is, is printing money, from being able to leverage those text messages. Right? Absolutely. And that's a, that's a great point, Eric. We've seen, you know, that's another way we've, we've seen, I'm sure you see it across the board too, is, Those those brokerages that have those, affiliated or inumhouse, mortgage businesses, the, the opportunities, whether it's with the apps that we power or otherwise for coumbranding and really driving opportunities across the business is, pretty, pretty deep and pretty important.

For sure. For sure. so let's, you know, let's dig into the general app space inside of real estate a little bit more. Obviously we talked about Redfin and Zillow being the two kind of primary apps and maybe realtor.com is right there. with them considering how much money they spend on trying to get people to download their app, too.

But in the brokerage app space, there's been, you know, some things that have changed with it over the past few years. And obviously, like you said, you're the dominant player, but before then, you know, 10 years ago, everybody kind of knew of this other company, smarter agent, who I'm going to guess you consider to be your closest competitor for a long time.

And that company was bought by KW. And just shut down. you know, if you, if you don't, if you're not a KW person, you can't use, the, the smarter agent app anymore. And I know there was franchises and, and relegate had much of their entire app strategy built around smarter agent. So what have you seen brands, brokerages franchises.

Do have they been moving over to you? Have they been abandoning app strategies? What's what's the look going forward now that KW is shutting us all down. You know, it's, it's really a mixed bag. Eric, and, also I just gotta say, you know, Brad and, and Eric at smarter agent were absolutely, pioneers in the space.

And so it was, glad to see that they had a good outcome at a Keller Williams. but in terms of what brands and brokerages are doing and in light of, the decision to, stop offering the service to other brokerages. we we've seen, parties take, a few different paths. you know, some, are, taking this as an opportunity to revisit their strategy and determine, do we want to keep, and app, moving forward?

others are, you know, the particularly. Big brokerages. I think there are, or especially at the franchise level, those are, some parties that are looking to bring some of those efforts in house. although I gotta say, having done this for 10 years, it's, certainly a lot of work in a big lift.

we do see a few parties doing that. And, you know, you mentioned, Realty is one example. They, have a firm that they partnered with, that, you know, helps them out in that capacity. But, you know, we are seeing a number of brokerages that, are choosing to, move to companies like ours and also in, in, so doing, maybe revisiting their app strategy and seeing, do we want to take this from maybe more of a, Hey, we're checking the box that we've got a mobile app.

And we can tell our agents, we have an app, but we're really not going to think about it a whole lot to one where they, they really want to have it as an integral part of their business. And, those are a number of the conversations that we're having right now. And they're, they're exciting. We've, I think over the last quarter, signed a more, more new, brokerage app deals than we have in, in some time.

And it's, good to see the, Continued excitement and the space. That's great. Cause it's, you know, I, I'm a, I, I hate that concept. The brokers, have sneaking around in their brain right now that they've lost the, the search or, to Zillow, Redfin, realtor, comics, cetera. You know, I, I think that having those types of apps or having an IDX, website, having that capability there, you know, w while it may not be the number one item on Google, when somebody does a search for their website or, or, you know, they may not be their broker jet may not be the number one thing when somebody searches real estate inside of the app store.

but it's there and it serves a major purpose. And so it's good to hear that. that you're not seeing them abandon it, regardless of whether they build it inumhouse or not. It's probably good for HomeSpotter that people are still seeing a reason to invest in this space. Right. Definitely definitely.

And, and, three quick tips, I'll give you, regardless of whether you work with us, build your own work with somebody else. you know, the best ways to drive app downloads really are threefold. you want to make sure that you've got a banner or similar on your website that, pushes, your, your mobile traffic and then encourages, that mobile traffic to, download the app.

really want to make sure you train your agents well, and that, the app that you adopt has a. Agent branding component to it so that when agents, give out their app agents, you know, have some certitude that they're giving out their version of the app and that weeds are going to come back to them.

we see that some of the more successful brokerages, have really engaged their agents really well at, distributing the app. and then the third thing is while it's, it's certainly hard to compete. On a national level, on search, if, if you buy ads in the, search ads interface for Apple, for example, you can still buy, keywords and do it only limited to specific, geography.

So, You can, certainly advertise and promote, your, your real estate app as kind of the primary app that people will see when they search in the app store and just limit that to the, MSA or, or the state or, area that you're in. And he can drive a lot of success that way as well. I had no idea that you could advertise in the app store to, or to a particular, locality.

I thought it was just country specific. So you're saying if you're in Minneapolis, like you are, you, you can run an ad for your app downloads just in Minneapolis. Absolutely. Oh, that's great. I had, I had no idea. , let's talk about your ad program now for a second. in 2018, Homespotter, we launched, a division called boost, and that's an easy way to automate listing advertising.

And there's been, it seems like just a, a, an avalanche, of push in this space recently. but 2018 was probably on their early tail, of that. So what, what made you go in that direction back in 2018? Yeah. You know, it was, kind of a confluence of factors, Eric. You know, first, first things first, you know, we had had a tremendous growth in our first, five years at, what was then, um HomeSpotter but, but we also knew that, You know, if, if we really wanted to continue to grow as a business, we were going to need to give some serious thought to, is there a, a second, product, that we want to bring to market?

And so, as we, went through that exercise, we really looked at, where did we see the current gaps, within residential real estate tech. And, in interviewing different customers, were there opportunities where we could match up, gaps in the industry to actual customer needs? And so in the, fall of 2016, I believe it was, we, started to, You know, really do a lot of these customer interviews, which led to, early pilot programs.

And, we, we did test out a number of different, potential approaches in the ad space. but the, you know, some of the concepts that really, came to the forefront as part of those, tests was while there certainly were others in the industry...