“She’s a top-rated agent. She’s fantastic,” McLean said. “But I got to the sale and sold in four days at a price I set doing my own research.”
The agent collected a six-figure commission following the sale, said McLean.
“It just blew my mind,” she said.
After looking around online, McLean concluded that new tools were needed to enable homeowners to sell their own homes — eliminating the need for traditional agents.
“There should be a way to do this,” she said. “If you’re willing to do the showings yourself, you’re essentially paying yourself what you would pay an agent to do, which can be thousands of dollars. Most people really like that trade-off.”
McLean previously founded a real estate advisory group and co-founded Ecological, a sustainability consultant for real estate companies.
In 2015, she launched Santa Monica-based HomeLister and became one of a growing number of local entrepreneurs overseeing tech-based startups disrupting key aspects of the real estate industry — from the buying and selling process to the servicing of mortgages.
HomeLister offers customers a software platform that guides sellers through the process of listing homes, collecting offers and closing deals. The company said in December that its services have saved users more than $17 million in commission costs.
The company is one of many in the Los Angeles area building accessory dwelling units, or granny flats, that meet the requirements set by local and state laws.
What sets Cover apart from many of its competitors are the digital tools created by the company to enable potential customers to first determine whether an ADU can legally be constructed on their property and then to plan out where it can be built and what it will look like.
The software behind this process is integrated with Cover’s prefabricated manufacturing process, which Chief Executive Alexis Rivas said enables the company to give accurate up-front price quotes without risk that projects will go over budget.
“We’ve massively cut down on the time and the cost of the design process,” Rivas said. “When we show you something, it’s going to be buildable, and it’s not going to change.”
Cover also guides homeowners through the often-complicated process of getting such structures properly permitted.
“We built this tool to replace what would normally be dozens of hours of research with something you can do in five minutes,” Rivas said.
Convenience is also a key part of Clutter Inc.’s business model.
The Culver City-based moving and storage company allows its customers to pack up items in boxes that are then picked up by drivers and put into storage. Through the company’s digital platform, customers can also retrieve items, which will be dropped off at their home.
Chief Executive Ari Mir said this system does more than make things easier for customers who might otherwise have to transport items themselves to a local storage unit. It also allows the company to store items in massive facilities, like its Fontana warehouse, far from the urban core where land and development costs are cheaper.
“That’s really how we innovated within the real estate industry, moving the facility far outside the city and (building) the technology to make that more convenient than driving down the street to a Public Storage,” Mir said.
The company’s software is used not only to facilitate pick-ups and drop-offs, but to coordinate the complex logistics of managing facilities that are up to five times larger than a typical storage center.
“We want to give you the most affordable service and the most reliable service possible,” Mir said. “Which means we have to figure out how to fit as much stuff as we can in there safely and securely whenever you need it. We’re constantly playing Tetris in these warehouses, and to do that intelligently, you need technology.”
Chief Executive Eric Rachmel said the company’s business has picked up dramatically in the last year due to the economic disruption brought by the Covid-19 pandemic. Even as real estate prices continue to rise, many borrowers have struggled to make payments, and lenders have had to adapt quickly to an evolving situation.
Brace’s software is used by mortgage companies when loans become delinquent. It expedites the process of restructuring loans and giving buyers options to make missed payments over time.
“You’re really getting much quicker response times,” Rachmel said. “Because we have digital borrower information and servicer information, we can render near-real-time responses for these borrowers in terms of what they’re eligible for and the different outcomes if they can no longer make their payments today.”
Here’s a look at companies around Los Angeles bringing a tech-based approach to the real estate industry.
HEADQUARTERS: Culver City
CEO: Ari Mir
FUNDING TO DATE: $315 million
WHAT TO KNOW: Clutter uses proprietary software to simplify the process of moving and storing household items. Instead of moving items into local storage centers, customers can pack up boxes and have them picked up by Clutter employees. The company then stores these items in warehouse-sized storage facilities. When customers want to access items, they can order a return delivery through the Clutter app or website.
HEADQUARTERS: Marina del Rey
CEO: Derek Merrill
FUNDING TO DATE: $63 million
WHAT TO KNOW: LeaseLock is technically in the insurance technology business, but the company’s services are aimed at creating an alternative to one of the most familiar aspects of the moving process for renters and landlords — the security deposit. The company’s platform integrates into existing property management software, enabling landlords to charge tenants a small monthly insurance fee that replaces the up-front cost of a security deposit. Major apartment owners such as Cushman & Wakefield and Greystar Real Estate Partners have already adopted the platform.
Listings and Sales Companies
HEADQUARTERS: Santa Monica
CEO: Lindsay McLean
FUNDING TO DATE: $6 million
WHAT TO KNOW: Launched in 2015, HomeLister aims to give homeowners the ability to advertise and sell a property without the use of a real estate agent. The company’s software guides sellers through the process of listing a home, showing it to buyers, gathering offers and finalizing a sale. Chief Executive Lindsay McLean said this gives sellers an opportunity to pay themselves for this work, which would normally be carried out or overseen by an agent collecting a commission.
Real Estate Exchange Inc., dba REX
HEADQUARTERS: Woodland Hills
CEO: Jack Ryan
FUNDING TO DATE: $141 million
WHAT TO KNOW: REX is based in Los Angeles and Austin, Texas, and is also focused on eliminating the need for — or at least bringing down the cost of — traditional real estate agents. The company works with both buyers and sellers while replacing the 5-6% agent commission sellers typically pay with fees amounting to roughly 2% of the sale price. The company’s software integrates with third-party listing sites to connect buyers and sellers and complements the work of licensed agents who work for the company.
Closing and Mortgage Servicing Companies
Brace Software Inc.
HEADQUARTERS: Santa Monica
CEO: Eric Rachmel
FUNDING TO DATE: $30 million
WHAT TO KNOW: Brace has developed a mortgage servicing platform designed to keep homeowners and lenders connected when a loan becomes delinquent. Brace’s software streamlines the document submittal process and allows borrowers to submit applications for financial assistance through an online portal. Founded in 2017, the company has expanded quickly in the wake of the economic turmoil caused by the pandemic and the subsequent confusion among borrowers and lenders over how to handle missed payments.
ENDPOINT CLOSING Inc.
HEADQUARTERS: El Segundo
CEO: Scott Martino
FUNDING TO DATE: $77 million
WHAT TO KNOW: Launched in 2018, Endpoint is the product of a collaboration between First American Financial Corp. and the venture capital division of Boston Consulting Group. The company takes a digital approach to the traditionally paper-heavy title and escrow business, offering an online platform meant to speed up the act of closing a home sale and completing the escrow process. Endpoint’s services are available to buyers and sellers in California, Washington, Arizona and Texas.
Real Estate Investment Companies
RM Technologies, dba RealtyMogul
HEADQUARTERS: West L.A.
CEO: Jilliene Helman
FUNDING TO DATE: $51 million
WHAT TO KNOW: RealtyMogul brings a crowdfunding approach to the commercial real estate industry, allowing users with relatively little capital to invest collectively in commercial properties using the company’s digital investment platform. Founded in 2012, the company has more than 200,000 registered users and has financed more than 15,000 apartments.
Commercial Real Estate Exchange Inc., dba Crexi
HEADQUARTERS: Marina del Rey
CEO: Michael DeGiorgio
FUNDING TO DATE: $55 million
WHAT TO KNOW: Crexi is a listings and sales platform focused on commercial, rather than residential, real estate. The company’s software allows brokers and investors to comb through thousands of commercial real estate listings and auctions all over the country. The company’s platform also gathers and maintains historical records on millions of properties, allowing users to conduct market research when making transactions.
ADU Construction Businesses
Cover Technologies Inc.
CEO: Alexis Rivas
FUNDING TO DATE: $12 million
WHAT TO KNOW: Cover designs and assembles prefabricated structures that can serve as granny flats or detached studios and meet the requirements of California’s accessory dwelling unit laws. The company’s software tools allow potential customers to determine whether their property meets zoning requirements for ADUs and then to plan out where a structure might go, what it would look like and exactly how much it will cost.
United Dwelling Inc.
HEADQUARTERS: Culver City
CEO: Steven Dietz
FUNDING TO DATE: $10 million
WHAT TO KNOW: Founded by longtime venture capitalist and Upfront Ventures co-founder Steven Dietz, United Dwelling has also developed software and manufacturing techniques to simplify the process of ADU construction for homeowners. The company assists customers with the process of planning backyard or accessory units and getting them permitted before assembling the homes and even helps install appliances and other features.