These Realtors didn’t like their options for finding clients. So they created an app.
There’s got to be a better way.
That’s the question that has dominated the thoughts of two Cary real estate agents, as each month they sent hundreds to thousands of dollars to websites like Zillow and Realtor.com, in the hopes that those companies would send potential clients their way.
Agents routinely spend money every month on home browsing sites that promise to recommend their services to people searching for homes online. Nearly 60% of real estate brokers now say they spend the largest part of their marketing budget on purchasing leads, according to a 2018 study from ATTOM Data.
But that process has routinely left Paula Grossman and Leigh Mullins, of Joseph Bailey Real Estate Co. in Cary, frustrated. The leads they received would not always be quality ones — sometimes it might be a child who accidentally contacted them — and it was confusing to them how these websites decided whose name got recommended.
“I was so tired of not having a clear understanding of what I was paying for,” Grossman said. “I’m good to pay for things, but it’s like, ‘Tell me why it’s this much and how many other people might competing with it.’”
So, eight months ago, Grossman, 50, and Mullins, 47, began pouring their own money into what they hope will be an alternative: a new real estate app called Zühaus.
While neither of them have a background in coding or app development, they said necessity drove them to plunge their savings into the idea. “We just needed a niche. We needed leads,” Mullins said.
The app is intended to remove the middlemen by creating an on-demand platform for customers to request an agent.
The app — which they paid a contractor to build — connects to Multiple Listing Service data to show the range of homes for sale across a map of the Triangle. Users can then find the location of a for-sale house they are interested in and request an agent to show them the home or talk with them about it. Once an agent is requested, it pings a notification to any nearby agents who are using the app. The first to respond to the notification gets to talk to the client.
In that way, the app works like ride-hailing apps like Uber and Lyft, except instead of meeting for a car ride, users meet for a home showing. “Right away they are face to face,” Mullins said, “which they don’t get, I’d say 80% of the time with leads.”
Customers can also schedule meetings on the app, if they don’t want to view a home right then.
To gain access to the app, agents will have to pay around $125 a month on average. The agents must also be verified members of Multiple Listing Service.
‘Just excited that it worked’
John Pugeda, of EXP Realty, sees the app as a useful tool. He found out about Zühaus after attending a launch party in the fall hosted by Grossman and Mullins.
Pugeda, who covers Wake and Johnston counties, came away from the party impressed by the idea. He now keeps the app running constantly in the background on his phone, just in case he gets a notification that someone wants to look at a house nearby.
That strategy has already worked. Shortly after downloading the app, while driving around the North Hills area, he got his first hit, from a woman who wanted to see a house in that part of Raleigh. He quickly claimed her request and showed her the house.
The process of getting the notification and meeting the customer took about a total of 10 minutes, Pugeda said, an amount of time he said impressed the client.
Since then, he has used the app to show four more homes. He’s seen enough that he is committed to paying for the app going forward.
“I was just excited that it worked,” he said.
Getting enough users is the real challenge
But getting more people like Pugeda on board will be perhaps the hardest part of making Zühaus a success. Without enough home buyers using the app, no agents will want to pay for it. And without enough agents, home buyers will leave frustrated.
And the market has a lot of entrenched players who already have reached that critical mass.
“We’re very concerned about blowing our credibility with not having enough buyers on there,” Grossman said. “Imagine if ... you subscribe, and then you turn it on, and it’s like crickets.”
The two plan to spend thousands of dollars per month into marketing the app, mainly on social media. Before they did any marketing, the app was able to attract a few hundred users, but now that the Android version of Zühaus is up and running, they plan to ramp it up.
They know there is no guarantee that the marketing will ultimately work. On top of the marketing, Zühaus hopes to gain potential customers by promising a $500 credit if they buy or sell a home with an agent through the app, an amount that comes out of the agent’s commission, Mullins said.
In the meantime, Mullins is flying to different markets across the country, hoping to ink partnerships with realty firms to use the app. She just returned from Houston this week after meeting with a potential partner. They are also beginning to meet with angel investors about bringing on some money to funnel into things like marketing.
The plan is to stay local for now, solidifying the app’s usage in the Triangle before launching in others parts of North Carolina and then eventually other cities in the Southeast.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
This story was originally published December 12, 2019 at 9:00 AM.
