Buying and selling a home is an inherently local process that is guided by local regulations and customs. As such, national real estate businesses must balance the consistency consumers expect from their brand—regardless of the market they are serving—with the ability to deliver hyper-local solutions that meet homebuyer and seller needs in specific markets.
At Qualia’s Future of Real Estate Summit, Max Lamb, Director of Partnerships & Integrations at Qualia, sat down with Whitney Curry, CMO of Pacaso, and Lynley Sides, COO of REX to discuss building local expertise and operations and scale.
Local expertise matters for national businesses
Both REX and Pacaso are national PropTech businesses with centralized functions. REX is a tech-enabled real estate brokerage that goes beyond the traditional brokerage model to offer homebuyers a “home as a service” offering whereby homebuyers and sellers can access a full suite of services from home search to close and even beyond (painting, moving, storage) all within a single interface. Meanwhile, Pacaso offers “second home dreamers” fractionalized ownership of second home properties in high-demand locations across the country.
Sides explained that local expertise is paramount to REX’s business model. REX operates in 29 markets; however, there are also submarkets within those markets. For example, downtown Los Angeles is quite different from Manhattan Beach in terms of price, time on market, and other factors. “Our homebuyers and sellers want to interact with agents who understand those differences and the fundamental personal nature of buying a home,” Sides said.
Pacaso also relies on local experts to discover the best properties for second home searchers. Instead of looking for neighborhoods close to great schools and with close proximity to commercial hubs, second home prospects typically search for homes with the best views or the closest proximity to the beach or other activities. “To serve and delight our buyers, we need to be local,” Curry said. Pacaso works to build relationships with local agents in the most in-demand areas who understand those markets intimately.
Technology to operationalize local nuance
REX thinks about technology as a tool to “enable and empower” customers with options throughout the homebuying journey. To achieve this, REX partners with various local vendors and experts who are integrated into REX’s system and customer-facing dashboard. For example, homebuyers and sellers can use REX to discover and hire a local painter or find a national provider with local operations like Paint Zen.
REX also uses technology to create scalable operations that meet local requirements and comply with local regulations. For example, REX uses Qualia to enable its agents to initiate an escrow directly. REX also offers a communication portal (Qualia Connect) for all transaction participants to interact. “These integrations with Qualia help us avert issues during the critical escrow phase and streamline our operations while also satisfying local needs,” she said. She added that Qualia’s system also enables consistent title & escrow operations so that REX can easily manage transactions in 19 states from a centralized location.
Sides noted that when scaling local operations, businesses should first assess what can be performed by technology without detracting from the customer experience. For anything that should be done by humans, businesses should also think about what can be handled by a centralized person versus a boots-on-the-ground person. She stressed that having local, on-site teams is important in some instances. “We want to be a local, caring, trusted person in the market. [Buying a home] is a very personal and emotional transaction.”
Technology to attract customers at a local level
In addition to leveraging tech to operationalize its offerings, REX also relies on technology to acquire customers. “Our most exciting technology is in the marketing area and the ways we market to buyers,” Sides said.
REX’s proprietary technology enables the company to run thousands of ads at a time. The system is capable of engaging in 5 billion auctions per month, assessing bids, and creating digital ads in milliseconds. REX’s consumer data enables its system to assess the likelihood of someone buying or selling a home within the next few months. For example, the system can evaluate the size of a family, and if the family is growing to determine if that household may be looking to move soon.
REX’s ads are also optimized by local market. Its machine learning algorithms determine how homebuyers in different regions of the country respond to different ads. For example, homebuyers in Nevada respond better to ads that highlight the pool, whereas homebuyers in California respond better to ads that highlight a view.
Advice for scaling a national real estate business to new markets
As Sides explained, technology is core to building a national brand with local operations. Curry offered two pieces of advice for businesses looking to scale.
- Communicate constantly and have a launch playbook. Businesses should have a strategic plan for each new market along with a timeline, budget, and clear roles and responsibilities for the launch team.
- Grow together. Curry encouraged businesses to work in tandem and true partnership with local partners. “For every property [Pacaso] supports, there are also ten local businesses we support,” Curry said. She encouraged businesses to work together with local partners to help support the business with local expertise that creates a “delightful experience” for the consumer.
To watch the full conversation between Sides, Lamb, and Curry, click below to download a recording of the conversation.