HomeLight’s Vanessa Famulener on the future of cash offers

Alcynna Lloyd: Hello, HousingWire listeners. Welcome back to another segment of HousingWire’s “Woman of Influence.” I’m Alcynna Lloyd, and today I’m joined with Vanessa Famulener, the president of homes at HomeLight. Thank you for joining me on “HousingWire Daily.”

Vanessa Famulener: Thank you so much for having me, Alcynna.

Alcynna Lloyd: Of course. Vanessa, before we dive into today’s conversation, I’d love to learn more about you and your background. How did you get your start in the housing industry?

Vanessa Famulener: Yeah. So, my start in the housing industry actually began through the tech world. My background has always been working at early-stage startups and industries that really have a large opportunity for disruption. So, the first early-stage company I worked for was Stitch Fix. I was there when there was less than 10 people, then moved over to Houzz, which was an early-stage company at the time in the residential construction and design space. And after House got pretty large, I was looking for my next early company to join and that’s how I came across HomeLight. I was really interested in the real estate industry. And so it’s been a great ride ever since.

Alcynna Lloyd: It seems like the real estate industry was perfect for you because you’re here today to discuss your achievements and what you’ve done in the industry. So, thank you for sharing your background with us. And now I wanna focus on why you were selected as a woman of influence. Vanessa, as president of homes at HomeLight, you’ve been recognized as someone that is not only influential but someone who’s helping to make real estate simple. You currently oversee both HomeLight Cash Close and HomeLight Cash Offer, HomeLight Trade-In, and HomeLight Home Loans products. And in 2020 alone, you expanded your products to new markets across the country resulting in 800% growth to date. Can you discuss what the 2020 market was like for your team, and the steps you took to ensure business ran smoothly while creating new products and growing your business?

Vanessa Famulener: Yes, for sure. So, in 2020, I’ll start with the products that we are going into 2020 with. So, back in 2019, we launched our Cash Offer and Trade-In products all supported by our HomeLight Home Loans business. What is Cash Offer? So, we start off Cash Offer. In today’s competitive housing market, cash is king and sellers want a cash offer, buyers are always looking for ways to potentially make their offers more competitive. And so cash offer really is about best of both worlds. It’s used by top-performing agents to enable their buyers to make a cash offer back private certainty of HomeLight. Really taking people who need a mortgage to buy a home, but turning them into cash buyers. For agents, this allows them to accelerate their commission and deliver a great experience for their clients. And for sellers, they get the certainty of cash but are able to have a family who really is lucky to live in that home.

So, our cash offer product is just providing way more certainty in the entire buying process. We also have a trade-in product. This product is really developed to help people who are looking to buy and sell at the same time. So, this pain point of you need to unlock the liquidity or equity in your current home to buy your next home. Sixty-six percent of homebuyers own their current home, and they need to sell that home to buy a new home. And so through trade-in, we enable buyers to buy before they sell their current home. We basically give clients a guaranteed offer on their home to enable them to buy their next property. Then when the agent goes ahead and lists that home on the market, the client gets full market value. So, you don’t have to give up any equity or value in your home, but you can live on your own timeline. And so with these products really going into 2020, it was a highly, highly competitive market. And cash offer and trade-in both together just took off like crazy because we saw at this image of a line out a door of an open house of 50 people. And that was just across the entire country.

Historically, non-competitive markets were suddenly getting 5, 10, 20 offers on a home. And so we really had our agents coming to us clamoring for using cash offer and trade-in for their clients so that they can really have a competitive edge and really get them into the home of their dreams. And so that’s to know 2020 market it was just unprecedented demand and we saw not just HomeLight, there’s a number of companies in this space rethinking the way that people can finance and enable their real estate transaction. And ourselves as well as a number of other projects it’s just been really a banner year and proving our product market fit and being able to scale these businesses.

Alcynna Lloyd: What steps did you take during that time to best lead your team to ensure success?

Vanessa Famelener: Yeah. So, I would say hiring was a very huge component of what we needed to do to be successful in 2020. So, we went from about 2 people on the team to now over 120. This was also during COVID. So, I used to take people to lunch before we’re gonna hire them. But we were hiring remotely and I’m hiring remotely and really went to having certain roles in one of our offices in San Francisco or Phoenix or New York that are also looking for other roles wherever we could find the best talent and the best subject matter expertise. So, I actually hired a woman on our team Rano who’s based out of Atlanta, and she’s just been a huge value add to our business. But if it weren’t for the pandemic, I probably would never have come across her profile. And so really finding the best talent, hiring the right people, and then developing the systems to ensure new hires were successful and ramping up in a fully remote world.

Alcynna Lloyd: And that’s really important. Thank you for sharing that with us. So, I want to continue highlighting HomeLight’s work is this year, the company was recognized as a 2020 HousingWire Tech 100 Real Estate winner. Many companies competed for this award, but HomeLight was chosen for specific reasons, including the company’s mission to be an objective end-to-end platform. Now, we know last year’s market experience tremendous uptick in demand due to many factors. So, I’m curious on how HomeLight managed to keep a competitive edge in such a saturated market.

Vanessa Famelener: Yeah. So, I’d say our positioning is very unique in this market where we are brokerage agnostic, we’re looking for the best real estate agents out there, and then providing them the most competitive tools that they can use in their markets with their clients. So, we’re not like a compass where we are a brokerage and we’re controlling that agent’s real estate transaction. We’re also not a direct-to-consumer company where we’re looking to really replace the real estate agent with an in-house agent. We are squarely looking to keep agents at the center of the transaction and doing that by transforming the way that people buy and sell their homes by empowering the best agents in every market to have the best tools and provide the best client and transaction experience. So, there’s really no other prop-tech player out in the space who’s brokerage agnostic looking for the best agents to work with, and then also providing a full suite of solutions for those agents. And you can look at other companies such as Opendoor, which is great where they really focus on no one iBuyer product, or you could look at a guaranteed rate mortgage lender. There’s a lot of companies out there specializing on one angle. We’re creating a platform where agents can come to us and have access to everything they need to deliver a fantastic real estate transaction to their clients, and we’re doing that for the top agents in every single market.

Alcynna Lloyd: So, to even continue highlighting what HomeLight is doing, I wanna discuss your new funding round. The company recently secured $363 million to reimagine the real estate process, which it claims will help them accelerate its flagship tech. Well, my CEO and founder, his name is Drew, he says that this is essential considering the industry has experienced decades of stagnation. I was hoping you could dive deeper on the ways the industry has remained stagnant when implementing technology and what you believe will move the needle.

Vanessa Famulener: Yeah. So, really, we’re taking this funding to bring our cash offer and trade-in businesses across the country to more agents in more markets. Part of this obviously is market expansion is needed to hire new people and new teams, but a lot of it too is that the magic really is going to come from an integrated transaction that brings together what we’re doing of building a home, buying or selling a property for a client through cash offer and trade-in, also financing their mortgage that they can put in their new house. We also have title and escrow services. And so what traditionally has been all these different players at different companies to make a real estate transaction happen. Behind the scenes, we’re integrating all the systems and tooling to provide an integrated, seamless transaction. And so as we expand to new markets, now we’re going to be bringing these products to new agents, to new clients. But we’re also looking to make the transaction as simple and satisfying and certain as possible. And so a lot of that work is also gonna be behind the scenes that no one ever sees but is ultimately going to lead to a fantastic client-agent experience. And as we go into these new markets, we’re always partnering with the best real estate agents in those markets to determine what are the tools that you need, what are the hurdles that you face so that we can continue to iterate and create new products and solutions for these agents.

Alcynna Lloyd: All right. So, we discussed some of the products that HomeLight has going on. I wanna switch focus and discuss your end-of-year report that just came out. I read HomeLight’s top agent insights year-end report which details trends and movements in the market. I want to discuss some of the highlights in the report including findings that suggest home prices have hit a wall and bidding wars are finally retreating. What is causing this decline in competition and what role has tech played in sustaining home buyer demand?

Vanessa Famulener: Yeah. So, it’s a decline in competition. We did not have a traditional cycle in terms of the buying and selling season the prior 12 months. There normally is a little bit of a lag in Q4. Last year was a super busy Q4. Summer didn’t slow down at all this past year in 2021. And so we’re really starting to see that a bit of buyer fatigue in the market in terms of people who had been in those bidding wars for 12 months, finally, were like, “Okay. Let’s take a backseat.” And we’re probably starting to get a little bit of that seasonality precedent. And because of that, inventory is playing catch up, we have less buyers out there. And so the inventory ratio is improving in buyers’ favor so they can be a little bit more selective. We’ve actually seen an interesting trend where we’re seeing more canceled contracts by buyers than normal. The first half of this year, a buyer would be static if they got a contract on a new home. Buyers were able to be a little bit more selective at this point. And so we’re seeing people potentially canceling contracts because of that.

I really think it’s more of a macro, that symbol than anything that’s going on just in the housing market with the vaccination rates up and there’s now travel allowed. People’s lives aren’t as centered on their home as they had been for the prior year and a half. And so people, when we were doing nothing but staying in our homes where you lived and how you lived at your house, became everything. And so now with people able to be out and about a bit more, I would say that’s also an indication as to why the housing market slowed down. Do you view it as temporary? I think they have a very strong buying season, again in 2022 in this spring, but there’s just really…it’s a little bit of a slowdown, but sentiment remains really high looking into the new year. I think we saw that 85% of agents are optimistic about the current state of the market for buyers and sellers going into the next year. And so it’s everyone is taking their breath for quarters before we hit 2022.

Alcynna Lloyd: Well, that’s definitely exciting. I know everybody in the housing market is really interested to see where we go now just because COVID has definitely impacted how the market does business in general. So, that’s something that we’ll definitely be interested in checking back on. Before we wrap today, though, I wanted to know if you have any advice to offer to any other women who aspire to your level of success?

Vanessa Famulener: Yeah. I would say always look for the unexpected opportunities. I often think that careers, both at a high level and also within your own company, or it’s not linear, it’s a step function. And so if you’re in a role that you’re learning and you’re growing and there’s another exciting opportunity that comes up, don’t be afraid to take it. Even my own journey at HomeLight has been very, very unexpected in terms of the roles that I’ve taken on. And I often say you have to take big risks for big rewards. And so be willing to take that risk and never turn down an opportunity. So, you never know what might afford you.

Alcynna Lloyd: That’s so true. That’s really great advice. Well, Vanessa, I wanna say thank you so much for joining us today.

Vanessa Famulener: Yeah. Thank you, Alcynna. Thank you so much for having me. It was great to speak with you.

Alcynna Lloyd: Of course. So, listeners, thank you again for tuning in to another “Women of Influence” interview. Join us tomorrow for even more great content. Thank you, and we’ll see you again.