A decade after a dissatisfying house hunt led Aaron Kardell to start building apps for people looking for homes, his Minneapolis company offers a suite of software used by about one-third of the nation’s real estate agents.
The company, HomeSpotter LLC, in January made its first acquisition to round out that suite further. It purchased Spacio, a Vancouver developer of software that lets real estate agents track, and follow up with, potential customers who visit open houses.
The two firms for several years had seen customers use their products together. And in the weeks since the deal closed, they have already started cross-marketing and had customers praise them for uniting their offerings.
“We were convinced it was the right next step for us to take but I don’t think we realized how well-received it would be in the industry,” Kardell said.
The company’s initial product, now called Connect by HomeSpotter, is a home sales app that can be customized by brokerages and Realtors with their own look and feel. It accesses listings data to show users what is available in a neighborhood and adds messaging capabilities for Realtors and their customers to discuss their shopping journeys.
While firms like Zillow and Redfin marketed and built similar apps aimed directly at consumers, Kardell decided in 2010 to work within the existing industry. He sold the app as a foundation for brokerages’ own mobile products.
After a period of rapid growth, the company about three years ago began looking for a new product to continue expanding. By then, social media platforms were consuming more of Realtors’ marketing spending and they needed more help managing them.
Kardell’s team came up with software that, tapping in again to listings data, designs ads or sponsored posts on social media platforms such as Instagram, as well as for websites that rely on programmatic ads. The product, called Boost, is now the biggest revenue generator for HomeSpotter.
“As listings change on the market, we’re able to detect those changes and work with brokers in a way to can automatically create or update their advertisements,” Kardell says.
For instance, after a home has been on the market for seven days, Boost will automatically change all of the agents’ digital ads to remove the “new listing” designation. If the agent schedules an open house for the property, he or she can use Boost to quickly update the existing ads with information about the event.
With Spacio, HomeSpotter picked up an app that Realtors can use to gather information about the potential buyers who stop in during an open house. It digitizes sign-ins at the open house and automates the follow-up process for agents.
Versions for brokerages track the popularity of multiple open houses and help agents and executives determine real-time patterns in market demand.
Over the past two months, employees from HomeSpotter and Spacio have completed the integration process for selling their products together. Kardell said that in coming months the firm will approach many of its existing customers to consider the full suite.
“In North America, we’ve reached one-third of the agents, which is pretty good,” Kardell said. “On the other hand, it still feels like we’re scratching the surface because, in most of those cases, agents have access to just a portion of our services.”
HomeSpotter raised some outside capital to purchase Spacio, but it is long past the stage of raising capital to fund its operations.
“We’re in a good spot in the sense of, even as we invest in growth, we are cash flow positive,” Kardell said. “We are able to control our own destiny.”
He declined to discuss the company’s revenue. HomeSpotter’s products are priced and sold differently depending on the customer. A large brokerage, for instance, will buy a license for hundreds or thousands of agents to use Connect. Meanwhile, the cost of using Boost depends on how much advertising an agent decides to do on a home.
HomeSpotter’s staff count doubled to 30 over the past nine months, he said, including a handful of people who came with Spacio.
In coming months, Kardell said HomeSpotter will focus on updating its original product, Connect. The way that agents and their customers communicate is constantly evolving, he pointed out. And so is the way shoppers are lining up their mortgage financing
“We still think there’s a lot that can be done to improve the process by which consumers collaborate with one another and their agent,” he said.
He said the firm also is keeping an eye out for changes in how long people hold onto homes, which may be affected by the rise of so-called “iBuyer” firms that will purchase homes instantly.
“The more homeowners see their house as closer to a liquid asset, that fundamentally changes a lot of things,” Kardell said.