There are always two parties in a housing sale transaction – a buyer and a seller, each party bemoans its own issues. The home buyers’ difficulties are well chronicled and find assorted solutions in the proptech and real estate sectors. By contrast, the individual home sellers and their various problems have been mostly neglected. There are digital marketplaces for property listings and middlemen services, but not much more. Other issues of individual home sellers, like inordinate delays in finding a suitable buyer leading to liquidity crunch and valuation and transparency concerns, have rarely attracted the attention of housing sector entrepreneurs.
Bangalore-based proptech company Ivy Homes understands that just like home buying, home selling too can be an equally stressful exercise. This company is not a property listing marketplace. Homeowners looking to sell their property connect with Ivy Homes. After a thorough evaluation based on over 80 parameters and due diligence, the company employs its unique pricing model and offers to buy the property at competitive rates. If the owner accepts the offer, the entire sale process can be as short as just two weeks. Ivy Homes then refurbishes the property and puts it up for sale. For homeowners, the entire process is swift, transparent, legal, hassle-free and assures them access to liquid capital with minimum time lag.
“We make offers on homes through our proprietary pricing model, which captures transactional data on each property and then predicts a fair price of the house using a Machine Learning model. The offer price is based on many factors like sale prices of comparable properties, unique features of the house (number of balconies, direct light, quality of fittings etc) and estimated cost of refurbishment,” says Abhilash Narahari, co-founder and CEO Ivy Homes, explaining the concept of their start-up.
Pritam Thakur, cofounder Ivy Homes says the company’s value differentiator is it is a transactional platform that buys a seller’s property, which makes it a short end-to-end process. “Other players in the market are mainly discovery platforms. They provide property listing spaces and other associated services,” says Thakur.
Narahari says selling a home can be really hard and the average sale cycle for a home in urban areas can range from a few months to a couple of years. Not all owners are in a position to wait that long and fair market price for their property at a given point of time is always a dilemma for them. Those who are not residing in the same city find it difficult to remotely manage their property sale. Narahari says Ivy homes address all these concerns of owners.
So, how does the company allay customers fears they are getting a fair deal and property’s market value? “Our offer price is based on actual transaction values. We also showcase this data whenever requested. We use data science to estimate sale price and liquidity (or time on market) for a particular house. This is done by aggregating millions of data points through various publicly available sources. We deploy decision tree-based to determine the fair price of a property,” Narahari says.
To ensure that the person looking to sell a property is the actual owner, and the property is free of any claims, the company has an in-house legal team which performs due diligence on every property it acquires (and sells). “This enables us to further assure the eventual buyer that they get a house with a clean property title,” adds Thakur.
Suresh Raman, who sold his home in Sobha Rose through Ivy Homes, says he is satisfied. “I was struggling to figure out a buyer, and Ivy stepped in to help me. I sold my house to them in less than a month.” Another home seller, Suresh Gupta, says, “Selling my house remotely was a breeze through Ivy as I live in another city. What struck me in particular was their clarity and transparency in the valuation of my home.” Suresh was a remote homeowner in Brigade Harmony.
The company’s primary source of revenue is through the sale of refurbished houses. It is able to sell the acquired houses at slightly higher prices than its own buy price due to the renovations that it carries out. The company also generates some additional revenue through the fees it earns for providing affiliate services.
The cofounders say that Ivy Homes is first of its kind proptech in the Indian market. They do not yet have an equivalent peer competitor in the country as no other player directly buys home properties. Globally, there are similar players such as Opendoor, Loft, and Habi but none of them have operations in India. Ivy Homes officially commenced its operations in January 2022 in Bangalore and is looking to celebrate its first year with total transaction value amounting to Rs 100 crore from average 10 transactions in a month. The company has recently raised $5.75 million in equity and $1.3 million in debt in its seed round from investors like Khosla Ventures, Venture Highway, Y Combinator, GFC, Foundamental, Better Capital, Titan Capital, and Rebright Partners.
“As a home buyer, the initial excitement of owning my dream home is often replaced with the stress of completing the transaction. The process is broken. To change the customer experience, you have to own the entire process, and that’s what Ivy Homes is doing. In a market like India, where real estate is a very important life stage, not just a purchase, for a customer, reimagining her experience is a large outcome,” says Priya, Venture Highway, an investor in Ivy Homes.
Both the cofounders have a background in real estate. Thakur has worked earlier as a real estate developer and Narahari’s family is in the real estate business.
Ivy Homes currently operates only in Bangalore and plans to use the funds for expanding its geographical footprints to other Indian cities. “Real estate is the largest asset class in India, making our addressable market extremely large, about Rs 4 lakh crores. And our value proposition of instant liquidity is attractive and valuable for home sellers. We plan to expand aggressively in Bangalore and are looking to triple our monthly transactions by the end of this year. We will also cover most micro-markets in Bangalore by the end of 2022 and enter other Indian cities in 2023,” says Thakur.