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Show Summary
In this conversation, Arman Javaherian discusses the innovative real estate platform HOMA, which aims to empower home buyers and investors by providing a more transparent and cost-effective way to navigate the real estate market. He highlights the challenges faced by buyers when dealing with traditional agents and explains how HOMA’s model addresses these issues through technology and AI integration. The discussion also covers the platform’s business model, user engagement strategies, and future expansion plans.
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Investor Fuel Show Transcript:
Arman Javaherian (00:00)
Yeah, I would imagine, I would want the investors to imagine what they could do with an extra 3 % of the purchase price of the home. How much that changes the math that goes into one property making sense long term or another not making sense. And so that’s a lot of money. Like on a million dollar property, that’s $30,000. So imagine if you got $28,000 of that back, what can you do with that $28,000? How does that, how much?How far along does that go to actually make the numbers work for that property and how many more properties that that give you access to if now you have that extra pool of money you can play with now, which is really exciting.
Michelle Kesil (02:09)
Hey, everybody. Welcome to the Real Estate Pros Podcast. I’m your host, Michelle Kesil And today I’m joined by someone that I’m looking forward to chatting with, Arman Javaherian who is a co-founder of a new platform called Homa, which helps buyers and investors buy a home in an easier and a money saving approach. So excited to have you here today on the show, Arman.Arman Javaherian (02:37)
Thanks, Michelle, for having us. Excited to be here.Michelle Kesil (02:39)
course, think our listeners are really going to take something away from how you’re supporting the buyers by back their commission. So let’s dive in.Arman Javaherian (02:50)
Absolutely. I can give you a quick background on the company if that helps.Michelle Kesil (02:53)
Yeah, absolutely. Go ahead.Arman Javaherian (02:55)
So my background is from Zillow. I spent six years at Zillow helping build out their premier agent platform. This was the platform that helped connect the millions of home buyers that were looking for homes with the hundreds of thousands of agents that were paying to kind of get advertising on leads on Zillow. As part of that process, I saw firsthand the frustrations of home buyers, of real estate investors, where they were doing so much of the work online. They were going on Zillow, looking for homes, searching for homes, coordinating with their lender, all these things. And then a real estate agent would…show up kind of near the end of the process and make 10, 20, $30,000. So a lot of folks had this frustration. And then when the NAR settlement went into effect last year, was when a light bulb kind of went off in my head. Because what the NAR settlement finally did is it brought transparency to the cost of these agents. In the old days, a home buyer didn’t really understand how much these agents were getting paid until kind of near the end of the process where…
You know, it was like too late and they already at the closing statement and they’re seeing it in their fees. But now buyers have to sign a contract before they can, with that buyer’s agent, before they can tour any property. And that contract stipulates most often that they have to pay 3 % to the buyer’s agent. And if the seller doesn’t offer it, then the buyer’s on the hook. And so what we’re seeing is a lot of home buyers and investors are taking a step back when they see this contract and they’re looking for alternatives because they feel empowered. A lot of them don’t trust real estate agents. They feel like agents are biased, which they are.
They feel like agents are basically have a conflict of interest. trying to push them into homes, push them into deals, and they’re slow. You know, you have to coordinate with the agent’s schedule to be able to get to see a house and you’re relying on them to come up with the comps and the price, et cetera. We do all of that, you know, within the platform instantly for you. And so when we launched, when, you know, we launched Homa earlier this year, it’s a full end to end platform. So you can go on it, search for homes.
We have the similar filters, et cetera. We have an AI search capability. You can find homes. We have our brokerage license. We’re connected to all the MLSs. We’re live in Florida right now, and we’re planning on expanding next year to Texas, California and other markets. But ⁓ users can basically come on, find the home, schedule a showing. We have a showing service that will meet them at the house on demand.
And once they see the house we have in the platform, we have them come up with the offer price. We analyze all the market data. We have AI that does all this for them. And once they’re ready to move forward, we can request the disclosures. The AI can analyze the disclosures, whether they’re inspection reports from previous deals or CCNRs or all sorts of different documents that they may have on the property. And then when they’re ready, we put a transaction broker on the deal like from HOMA. And what that transaction broker does,
All they do is they guarantee that you can get that buyer’s agent commission back to you. And so right now we’re charging about a $2,000 flat fee. So let’s say if the example is that the buyer’s agent commission is $20,000, we would rebate you back $18,000 at closing. And that’s money you can use for renovations. You can use that for the help of the down payment. can, know, really to help improve your cash on cash returns and really to help hit your IRR targets for what you’re investing in.
Michelle Kesil (06:50)
Awesome. Wow. So innovative and really supportive for the buyers. How has the launch gone? what kind of critiques or comments or yeah, how has it gone since it’s been out there in the world?Arman Javaherian (07:10)
Yeah, so when we launched the first version of it, it was really focused on helping investors and home buyers kind of do it yourself. So we weren’t representing you anywhere on the transaction, but we let you put the offer together. We put the contract together for you, et cetera, automatically. And what we noticed is a lot of these home buyers were approaching these listing agents on these properties. And because they weren’t working with a buyer’s agent, the listing agents were kind of trying to take advantage of them.So the rule says in the MLS side that if the listing agent isn’t basically if there’s no buyer’s agent in the transaction, then the listing agent can pocket both sides of the commission. So this is something really important, I think, for ⁓ the listeners to understand because not everyone understands this. When the seller of a home signs their contract with their listing agent, it’s a contract between the seller and the listing agent. A lot of times, most often, there is checkboxes that are checked that basically say that the seller’s agent
doesn’t have to split that 6 % commission if there’s no buyer’s agent involved. And so our home buyers that were using the old version of HOMA were doing this on their own. They were encountering these listing agents and then all of a sudden the listing agent was trying to basically pocket both sides of the commission once they realized there was no buyer’s agent involved. So we changed the model about a month ago so that we are actually the transaction broker, which allows us to claw back that commission that the seller was gonna pay so that listing agent legally cannot take it for themselves.
And then once we have that, then we refund back 75 % or so of that commission back to the buyer as part of the closing statement.
Michelle Kesil (08:42)
Awesome. Yeah, I think that is really good feedback for you guys and yeah an important pivot that you had to makeArman Javaherian (08:50)
Yeah, absolutely. And the only way we really understood how that pivot was going to happen was by me putting myself in the middle of that flow. so anyone out there that has their own business, I think this is something that’s important. If you have processes that you don’t understand, really put yourself in the middle of it. It’s OK to do manual things early on. In fact, you should do manual things. And we’re a startup. We’re a small startup. We just launched. So me being in the middle of it,I was the one that was basically trying to interact with the listing agent, connect the home buyer with the listing agent. And that’s how I saw this. I was seeing the listing agent trying to understand like, are you a buyer’s agent or not? Because if you’re not a buyer’s agent, then I’m keeping the whole commission. Like they would literally tell me this. And so I saw it firsthand and it allowed me to really change the model, change the product to, in response to that, to protect our home buyers. And that’s really what we’re doing. We’re trying to protect the people buying homes on our platform from
these listing agents that are trying to take both sides of the commission.
Michelle Kesil (09:44)
Yeah, absolutely. That’s important to know. So how does this platform work for investors? Like what would you say it could support them with? Because I know there’s so many different investing strategies with fix and flips and buy and hold and all of the other ones. But yeah, how can you see this platform supporting that group of people?Arman Javaherian (10:41)
Yeah, I would imagine, I would want the investors to imagine what they could do with an extra 3 % of the purchase price of the home. How much that changes the math that goes into one property making sense long term or another not making sense. And so that’s a lot of money. Like on a million dollar property, that’s $30,000. So imagine if you got $28,000 of that back, what can you do with that $28,000? How does that, how much?How far along does that go to actually make the numbers work for that property and how many more properties that that give you access to if now you have that extra pool of money you can play with now, which is really exciting.
That’s one angle. So it’s the money saving angle. Then the other angle is if you’re in an environment where it is competitive, where you are worried about getting a specific property that you really want in those environments, HOMA actually really excels.
because we have this showing service that allows you to get into it. It’s live all through Florida. It lets you get into a property immediately and we would schedule you with a showing agent that shows up and their whole purpose of that showing agent is just to open the door for you so you can see the property and you can do that on demand right away. And the beauty of that is once you’re there, then if let’s say that same day you like the property, you can go on Homa, we come up with the offer price for you.
pull all the comps for you. look at all the data, a lot of proprietary stuff that we have that we’d run through our AI models that we built. within those, you can actually get the offer price and then we put the contract together for you as well. So within the same day, you can see the property, price the property, get the offer together as well. So you can move quickly in those environments. You’re not waiting on an agent that may be handling 10 other clients or that they don’t have time and they’re on vacation or something happened with their.
family, they’re not able to make it work. We get rid of all of that to get you into the property as soon as possible.
Michelle Kesil (12:33)
Yeah, absolutely. That is super helpful. So this platform does everything an agent can do or does it, are there like certain limitations that it has?Arman Javaherian (12:45)
Yeah, there’s a few things that we can’t replace a human with. And so one of them is actually opening the door to the house. You need to have a licensed agent there to do that. So that’s where our showing service comes in. ⁓ In addition, lot of home buyers want, and investors, they want to talk with ⁓ a human to discuss offer strategy, to discuss how to negotiate with the seller side, because the AI is not going to negotiate with the listing agent. We’re not there yet, and we may never get there.But any of those kind of in-person interactions or over-the-phone interactions between the seller side and the buyer side, we want to put our broker in the middle of that. Because that is what guarantees that the seller’s agent can’t pocket that commission. It’s what guarantees that we can rebate you back by having someone in the middle. So that’s really what you need in human…
Michelle Kesil (13:35)
Awesome. And is this platform like a one time purchase? Is it a subscription? Like how does joining it work?Arman Javaherian (13:43)
Yeah, so we only charge at the close. So you don’t have to pay anything. You can use the service. You can use the showing service. You can go to homes. We don’t charge for any of that. We only charge when you close on the home, if you close on a home. And so we only get paid if the deal is successful, which is really nice. I wanted it to be that way because it really aligns ⁓ our goals with your goals. Like if only if you’re successful, do we get paid.Michelle Kesil (14:06)
That’s amazing. Yeah, so I guess it is quite similar to an agent in those ways.Arman Javaherian (14:11)
Yeah, and that’s the beauty of it. By staying within the agent model, the larger agent model, it allows us to claw back this commission. And it allows us to claim that commission. But by turning the rest of it all powered by technology, it really allows us to cut the costs. So we can rebate all that money back to the buyers and the investors.Michelle Kesil (14:29)
Amazing. What are you most focused on solving or scaling to next in the business?Arman Javaherian (14:37)
Yeah, I think ⁓ we’re constantly working on ways to improve engagement with the platform. So one of the things we’re working on right now is creating smart alerts that will tell you when specific properties that match the criteria that you’re looking for show up in the market. We think that’s really important. It’s a core feature that I think we obviously would have wanted from day one, but we’re only a few months old and we’re building that right now.We’re also doing a lot of work to improve just the core experience, the speed of the app. We want it to be as snappy as possible. It’s really, it’s a great product already, but I have very high standards when it comes to that stuff. And then in addition, you know, obviously we’re working on our expansion plans. Like how do we go beyond Florida? How do we move to Texas and California as well? You know, what does it look like in those states? Who are we partnering in with those states? What are the specific data points about properties that someone in Texas cares about that maybe someone in Florida doesn’t?
So for example, in Florida, it’s important to understand the flood zones and the flood risks that may not be as much of concern depending on where you are. So really having hyper-personalized data points for each property based on where you are is, I think, going to be really important for our users.
Michelle Kesil (15:45)
Yeah, definitely that makes sense that there’s those differences depending on the regionArman Javaherian (15:51)
Yeah, absolutely.Michelle Kesil (16:33)
So what are some maybe of pushback that you’re getting with clients that are used to the traditional agent model?Arman Javaherian (16:41)
You know, surprisingly, like once people realize how it works, they love it. Um, most people, and I’m not, you know, I’m not just trying to turn our home, but most people don’t like working with agents and all the real estate investors I talked to more than anyone agree with that sentiment because they are very knowledgeable. They’ve done, they bought homes before they understand the process. They can do everything in their sleep. Right. And then all of a sudden they’re like, you stay, they’re forced to use an agent and that agent takes 10, 20, $30,000.And that’s something that’s a huge deal for them. So I think more than most folks, real estate investors really get excited because it allows them to take the control. They can use the HOMA AIs there all the time to answer any questions that they have. We’ve had people ask over thousand questions of the AI just in the last couple of months. And that’s been really helpful for those folks. And so I think that’s the biggest feedback I’m getting from users is like, the model makes sense and then they just want to, know, they’re excited to move forward with it.
Michelle Kesil (17:36)
Totally. Yeah, can you expand more on how AI is like working behind the scenes on this? Yeah, integrated with all this.Arman Javaherian (17:46)
Yeah, think ⁓ we spend a lot of time finely tuning the AI. That’s when it’s kind of just a term that’s called where you really make the AI be very specific to a industry or vertical. So we spend a lot of time making sure with real estate professionals involved, helping review it so that the answers that it provides are very specific to not just real estate, but to Florida real estate and Florida real estate norms and Florida real estate rules and regulations.And so it’s important that it’s trained on that information. So then when people ask a question, it knows and it has access to the internet and has access to all these things and tools that it can pull in. All the MLS data, the sold history, all that stuff we can pull in and it can use that. Like for a good example is a lot of times you’ll see on a home that it says it’s been on the market, like, you know, go on Zillow, says it’s been on the market for like 10 days. But when you
dig into the price history, you’ll see that the listing agent kept taking it on and off to reset that days on market value. Well, our AI has all that information and all the offer suggestion and the price that it comes up with. It takes that into account. It doesn’t just take for granted that it was been on the market for 10 days. It actually goes and said, actually the real days on market is 100 days. And so as a result, it changes the whole strategy because you can imagine a property that’s been on the market 100 days versus a property that’s been on the market 10 days. It’s a very different negotiation tactic.
very different starting price for the offer that you want to
Michelle Kesil (19:12)
Yeah, amazing. That’s so cool that it can really like use all of that data and create new strategies that, yeah, again, humans can, it’s just in a different way.Arman Javaherian (19:24)
Yeah, yeah, it’s, it’s a for something like real estate where there’s so many data points, like thousands of data points for every house, not just for that house, all the houses surrounding it, all the ones that are on the market, all the ones that were sold, you know, all the different behaviors for the changes in the price history, ⁓ even understanding like how popular a property is, maybe on the legacy platforms, etc. Like all that stuff is data points that you can feed into the model. So for something like real estate is, it’s perfect for AI.because that’s what AI does best, especially right now. It’s not good at like negotiating with a human, but it’s great at crunching the numbers and helping you really understand the true value of a property.
Michelle Kesil (20:01)
Absolutely. Yeah, that makes sense for it to be able to support in all those ways.Arman Javaherian (20:06)
Yeah, any other questions you have?Michelle Kesil (20:10)
Yeah, so I know you mentioned that you’re currently out in Florida and looking to expand other markets. But what does like that expansion look like? Are you just offering this to different buyers and investors or like who is your target audience that you’re looking to expand into?Arman Javaherian (20:28)
Yeah, I think real estate investors are a big target audience, which is why I’m on this call. think real estate investors go through a lot of properties. They understand the market and they’re trying to save money whenever they can. That’s the core part of the business. So the platform allowing that is really big and there’s millions of real estate investors in this country. So it’s really exciting to kind of get in front of that community. So as we expand beyond Florida, we’re looking at just the biggest markets that exist. So Texas is a huge market. California is a huge market. There’s other states as well.that we’re considering after that. My goal is like, I’d love to have HOMA in front of hundred million Americans by the end of Q1. And that’ll allow us to really get a big kind of group of users that we can help. Because for real estate investors, obviously it’s a financial thing, but if you think about first time home buyers, 40 % of first time home buyers struggle to come up with a 6 % down payment. That’s the average down payment for a first time home buyer. If you think about a buyer’s agent taking 3%,
That’s half of your down payment that’s now gone. So big benefit that we provide is especially helping people get access to homes and homeownership. That’s a big part of our mission as well. And I think that’s something that we take a lot of pride in.
Michelle Kesil (21:37)
Yeah, absolutely, that’s incredible. So, before we wrap up here, somebody wants to reach out, connect, learn more, where can people find you and connect with you?Arman Javaherian (21:47)
Yeah, so the website is called tryhoma.com. So that’s www.tryhoma.com. It’s free to sign up. Like you don’t have to pay for anything. You can search for homes. You can use all the AI for offer analysis, analyzing documents, all that. And then when you’re ready to kind of take the next step to tour property, we would just basically have you sign a buyer agreement so that we can be that transaction broker representing you so that the listing agents don’t take advantage of you and try and claim that you’re not working with a buyer’s agent.So that’s the best way to just try out the platform. If anyone wants to connect with me, I’m on LinkedIn. You can just search for me, Arman Javaherian, and I’ll pop up. You can probably just put Arman Java. You don’t need my whole last name, and then I’ll be right up at the top of the list. not that many of us named by name.
Michelle Kesil (22:32)
Perfect. Well, I really appreciate your time, your story, and your perspective. Thank you for being here.Arman Javaherian (22:37)
Of thanks for having me. Excited to have talked to you about this.Michelle Kesil (22:40)
Yeah, absolutely. And for the listeners tuning into the show, if you got value, make sure you’ve subscribed. We’ve got more conversations with operators like Arman who are building real businesses. We’ll see you on the next episode.
