Listing your home on the market can be a scary experience. There is no certainty that your home will sell in a timely fashion and sometimes your real estate agent isn’t acting in your best interest. These uncertainties cause homes to sit on the market for extended periods of time, usually decreasing their value while aggravating anxious sellers. Felix Homes, the new real estate tech platform, fixes this issue by completely restructuring the relationship between homeowners and agents by getting rid of broker fees. In fact, Felix Homes pays homeowners 1-2% of market value just for listing on its platform for 90 days, and if the home doesn’t sell after 90 days Felix Homes will purchase the home at market value. That’s really putting your money where your mouth is.
AlleyWatch sat down with founder and CEO Tyler Forte to learn more about exactly how he is reinventing the relationship between agents and homeowners.
Tell us about the service that Felix Homes provides.
Felix Homes is a tech-enabled real estate platform that gives homeowners the certainty of a guaranteed sale, an upfront cash payment to help with moving expenses and an incentive structure that gets them the highest price. Unlike traditional brokers, Felix does not charge a commission.
At Felix we don’t want to be your agent, we want to be your home selling partner. Felix is the only platform that combines key benefits of the direct buyer model, such as offering a guaranteed sale, with advantages that stem from working with a traditional real estate agent. Unlike a direct buyer which gives homeowners a guaranteed sale at the cost of a 7-12% convenience fee or a traditional agent that tries to get homeowners a high sales price with no guarantee the home will sell, Felix combines the best of both models to provide the ultimate selling experience.
What market does Felix Homes attack and how big is it?
Felix will initially offer its service to middle-market single-family homeowners in New York, Connecticut, Michigan, and Tennessee. Last year alone, there were roughly 5.5MM single-family homes sold in the U.S. representing about $1.3T in sales.
What is the business model?
At Felix, we pay homeowners 1-2% of market value just for listing on our platform for 90 days. For example, a seller whose home is worth $400,000 can expect to receive a payment of up to $8,000 just for allowing Felix to list the home. Felix will then market the property and look to find a buyer who is willing to pay more than $400,000. When Felix finds a buyer, we’ll earn any amount over $400,000 capped at 5%. Any proceeds over our 5% cap will go back to the home seller. This incentivizes Felix to sell the home for the highest possible price. If Felix is unable to find a buyer within 90 days, we’ll purchase the home at a slight discount, so the seller can have the certainty of a guaranteed sale from day one. Either way, Felix never charges homeowners a commission.
What inspired the business?
Having gone through a broken selling process roughly 12-months ago and hearing other ‘horror stories’ from friends and family, I started Felix to help reduce the stress of selling a home. Homeowners already have so much on their plate, which is why I want to create a better home selling process.
In the event that Felix must purchase a home, what do you do with this inventory?
In the event Felix must purchase a home, we will look to make minor improvements to the home and re-list it. The home seller has the certainty of a sale from day one and can move on to their next home worry-free.
What are the milestones that you plan to achieve within six months?
Within the next 6-months, Felix will look to complete $50MM in transactions saving homeowners an approximate $1.5MM in commission fees. Felix will then look to expand their geographical footprint across the U.S. helping as many homeowners as possible.
What is the one piece of startup advice that you never got?
Don’t be afraid to fail. Felix has been through numerous iterations trying to figure out the ideal model. I believe the key is to fail fast and learn from your mistakes. Building a startup is an iterative process and you can’t get discouraged by failures. The most important quality when starting a company is perseverance.
If you could be put in touch with anyone in the New York community who would it be and why?
If I could get in touch with anyone in the New York community, I’d like to meet Aaron Block, the Cofounder and Managing Director of MetaProp. Given Aaron’s expertise in the proptech space, I believe his insight would be instrumental in helping us expand to new markets.
Why did you launch in New York?
Felix was started in New York because it’s the real estate capital of the world. In addition, New York’s startup community is extremely close-knit making it easy to meet people willing to lend their advice. Also, two of Felix’s cofounders are New Yorkers making it a perfect place to launch.
What’s your favorite restaurant in the city?
My favorite restaurant in NYC is Wolfgang’s on 3rd Ave.