Drawn to beautiful surroundings, tech culture, and a startup-friendly business environment, Colorado has become a magnet for entrepreneurs and early adopters. Colorado and metro Denver have been hailed as a startup haven for businesses of all kinds, and the Kaufman Index ranked Colorado in the nation’s top five locations for entrepreneurs. It’s no wonder real estate innovation has also blossomed in the Centennial State.
Four groundbreaking real estate companies based in Colorado are riding this wave, bringing change to the industry as a whole. Let’s take a look at how they’re doing it and takeaways you might be able to use in your business.
Boulder-based SQFT (square foot) created the world’s first fully transactional real estate app. Through the mobile platform, real estate pros or the sellers themselves are able to list, syndicate, set up showings, negotiate offers, and create contracts.
Using the app is free, but sellers do still sign a listing agreement to go live on the MLS and beyond; once a property is sold, the listing fees range from 1 to 3 percent (depending on representation) plus a $500 transaction fee.
SQFT sellers and buyers can choose to be unrepresented, use an affiliate agent, or an outside agent. Information entered by buyers is verified for the seller through LexisNexis. Like the Redefy model, once clients go under contract, they start working with an in-house specialist through closing; SQFT calls these specialists transaction coordinators.
“I just found that the seller wanted to have more control,” said cofounder James Simpson in a recent phone interview. “They want to have some voice in the process. So we tried to implement a platform that would give them that.”
Simpson and techie Andy Brandt created SQFT with the initial goal of being the only brokerage behind the app. But by 2017, they will have affiliate agents in all 50 states. Plus, they’ve discovered another way to make their app have a greater national influence.
After their launch in 2015, other independent brokerages approached them about adopting the app. Simpson and Brandt started with a real estate group in Australia, creating a white-label version expected to roll out in early October. This project has spurred them to open the app to other independents who need a complete, branded app that offers a value proposition. SQFT charges them a flat technology fee ($250 for the listing side, $250 for the buy side) to use the platform.
“It auto-fills a contract, allows negotiation through the platform, and really allows limited touch for the listing agent.” Simpson said. “Which is what they need in order to be more efficient, do more volume, and ultimately make more money.”
Chris Tamm was running one of the largest real estate teams in the nation. His team needed an all-in-one software solution to generate leads and help him manage his growth. After he couldn’t find one that was affordable or scalable, his team collaborated with developers to create a one-stop shop for every aspect of running a brokerage. Firepoint Solutions was born.
The solution was so successful that, like SQFT, other brokerages started coming to him with requests to use it. He also said no at first, but then realized the market potential of becoming a real estate tech company. Based in the Denver Tech Center, Firepoint Solutions was launched in 2013 as a month-to-month subscription platform.
Firepoint clients range from single agents to 100-plus agent teams, and they can generate, nurture, and manage leads through customized searches, workflows, distribution, and data collection. Team managers can follow lead progress, keeping staffers efficient and accountable. Individuals and teams can manage the steps and paperwork of transactions to closing while tracking costs, commissions, and split. Business reporting tools also help track spending, ROI, and more. Long-term planning is also included to generate referrals and follow up with past clients.
In the constantly changing world of marketing and industry requirements, Firepoint is committed to keep its platform updated, as often as every 90 days or less.
Redefy Real Estate
Jordan Connett and I wanted to create a solution that saved customers money yet was still profitable for agents and brokerages. So we founded Redefy Real Estate, where we offer a flat fee for listings while providing a full-service experience for both sellers and buyers.
The question I’m most often asked by agents and traditional brokers is, “How is this model profitable?” Well, the entire process was changed.
First, the agent’s role changed. In a traditional brokerage, the agent is responsible for every aspect of the process, from marketing to contracts to closing. Redefy reinvented the agent’s role by scaling down duties to one thing: connecting with buyers and sellers.
Once a sale or purchase comes to a contract, a contracts manager steps in to handle all the paperwork and steps to closing. As a result, a high volume of transactions can be processed without sacrificing service.
Second, technology infrastructure was implemented. Our custom cloud-based platform creates a secure, single sign-on, providing a real-time solution for every step of the process. The system can also manage lead generation, nurturing, and follow-up.
Redefy’s model was quickly embraced by Colorado residents and was followed by our rapid expansion into 10 states in four years, resulting in a 103 ranking for the 2016 Inc. 500 list of America’s fastest growing companies.
STEPS Real Estate
STEPS made its mark in Boulder with one distinct feature: personalization. Focusing on client education, local knowledge, and personal relationships, it created a friendly model for both buyers and sellers. Its branding and voice appeals to the individual’s dreams and desired experience, creating a kind of custom concierge feel while employing the same brokerage processes as a major brokerage chain.
“We’re about very high customer service,” said cofounder Sean Moudry. “We’re intense about it.”
STEPS has a varied clientele, but its style is uniquely appealing to a growing force in the real estate market: millennials. Bypassing the oft-viewed sentiment of millennials as basement dwellers not interested in real estate, STEPS has taken great pains empowering this generation to home ownership, through clever marketing, an out-of-the-box style, and client education.
“A lot of the other real estate companies are ignoring them,” Moudry said. “They don’t have the training for them. They’re a different group of people, their expectations are different, and the way they deal with technology is different.”
The brokerage also educates young would-be agents with an in-house real estate school. They also teach them business principles for financial success, and find a lead-generation model that fits their personality profile (based on tests such as Meyers-Briggs).
Unlike tech startups, Moudry embraces training them in a face-to-face model that creates a communal sense of family: “We want them to be happy. We wanted to be that place that isn’t an online environment. We’re really a community, a place where an agent can go to and feel supported. And [they] feel like they’re getting high levels of service, so that they’re going to provide high levels of service to their client.”
Knowing their audience, they understand the need to market creatively. Their latest venture is a upcoming, self-funded TV series called “Agents with Altitude” that they hope will find a network home. Produced by InTroubleZone Productions of Naples, Fla., the team that created Discovery’s “Tobacco Wars,” the show follows four story lines:
- Cofounders Sean Moudry and Kevin Byrne collaborate to go against the grain of traditional brokerages;
- STEPS’ millennial agents share their lifestyles, struggles, failures, and successes in real estate;
- Sean and Kevin disagree about growth and going national; and
- Kevin pursues personal real estate deals, vying with rival agent Lisa Ray.
STEPS works hard to keep a local vibe, exemplified in their branded VW bus that tools around Boulder. As they expand via franchising to surrounding Colorado neighborhoods and beyond, there’s a desire to make each office feel as if it’s a local one-off that knows its neighborhood and is plugged into the community atmosphere.
“We’re very local-neighborhood–focused,” said Moudry. “We want our brokerages to really not be just a city-branded office. We want each office to take on the vibe of their neighborhood. We want to have more small offices, because we’ve designed it so they can operate in a smaller market and still be profitable.”
Colorado’s pro-startup culture and its strong population of investors to provide seed money have been a boon to real estate innovation. Continued prosperity in the state will no doubt foster interesting new twists in buying and selling property.