New firm aims to reinvent the way homes are bought and sold

Technology continues to disrupt the way business traditionally has been done in many industries, and real estate is no exception.

Homie, a Utah-based company launched in 2016, is an online-based, flat-fee real estate brokerage co-founded by Bonanza High School and UNLV graduate Mike Peregrina.

The mission for the growing company is to make homeownership “easy, affordable and accessible,” Peregrina said.

One of the largest demographics for Homie is first-time homebuyers, who account for roughly 60% of the company’s homebuying business, Peregrina said.

Fees vary by state, but according to Homie, the seller of a $300,000 home can typically save $6,000 to $15,000 by using the noncommission-based platform instead of a traditional real estate agent.

Homie also offers title, insurance and mortgage finance services.

Vegas Inc recently talked to Peregrina to learn more about the expanding company—it launched in the Las Vegas market in March—and his journey as an entrepreneur.

With the way the pandemic is shifting so many industries to online and contactless models, will the traditional way real estate brokers have operated be forever changed?

I think the market is so big, the answer is that people will still work with traditional agents. In terms of market share and tilting the scale, we went from zero market share to about 6% market share in just four years in Salt Lake City. We have almost 1% market share in Phoenix. I have no doubt we’ll be a top-10 player in Las Vegas in no time. I think the customers on the Homie platform, typically between the ages of 25 and 55, will transact with Homie again and again.

Homie has licensed agents on the buy and sell side, but employees don’t work under a commission-based system. The company is kind of reimagining how homes are bought and sold. Why?

I had a healthy portfolio of homes but ended up losing it all in the subprime mortgage crisis. In late 2008, I woke up with this idea that it’s my responsibility to fix the real estate industry.

I started writing down what I thought was wrong with the industry—the misaligned incentives, the commissions, all the service providers that have their hand in the cookie jar, whether that’s title and escrow or insurance or home inspection and warranty.

The real estate agent and the loan officer, all those fees they get, are north of 10%. I realized that the customer isn’t at the center of the transaction.

I had studied architecture at UNLV previously, but I went back in 2009 to get a degree in finance. After graduating, I worked as an investment banker and then worked in venture capital. I came across the pitch decks for Airbnb and Lyft and Uber, and I was just fascinated with the shared-economy concept.

How is the company being received so far in Las Vegas?

It’s going well. In terms of units sold, we’re ahead of our original forecasting from January, which was before COVID-19. We have almost 20 employees in Las Vegas, and they’re amazing people. Right now, customers—people buying or selling homes—are sensitive to understanding the transaction and all the money that needs to be saved. I think we’re going to do really well in Las Vegas.

Where did the name Homie come from?

If you think about the word, it means someone who has your back, a trusted friend. If you look at people between the ages of 25 and 55, many of us grew up calling each other homie.

Are you worried about the housing market in Southern Nevada and what could happen because of the COVID-19 economic downturn?

In April and May, transactions were down 40 to 50%. June was a little bit healthier, but I think the recovery is well on its way now. Average sales price is still up. Interest rates are also still very low, so I think the housing market will continue to push forward. Depending on what happens with vaccines, I think there will be a lot of pent-up demand as the economy begins to open up more. We could have an incredible [fourth] quarter and an incredible 2021. There you go, right? That’s my spirit as an entrepreneur. I don’t think the sky is falling.

Business

This story appeared in Las Vegas Weekly.

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