Ever find yourself perusing through Zillow (NASDAQ: ZG) and start wondering what a house could be worth? Well, Realm just raised $3 million to help build out its centralized data platform to tell you just that.
Investors in this deal included Primary Venture Partners, Lerer Hippeau, and Liberty Mutual Strategic Venture Partners.
More on Realm
Realm is working on taking Zillow’s Zestimate to the next level. The company is building up a centralized data set of single-family homes to analyze and highlight opportunities to increase a property’s value through renovations, additions, rental units, and more.
Instead of trying to guess what the return on investment (ROI) of a remodeled bathroom will be, Realm is building a platform that will give you an accurate estimate.
Realm’s website says that it "analyzes thousands of unique data points -- from property history to neighborhood trends to project costs -- to measure your property’s potential and equip you with the personalized insights and practical recommendations you need to make smarter financial decisions."
The company breaks the process up into three different steps:
- A potential value assessment is done where Realm tells you what your home could be worth.
- You’re given a "Realm Score" on a scale of 0-1000, which indicates how much of the potential has been realized.
- Realm then offers you personalized advice as you consider what projects make sense to take on.
The "Realm Score"
The Realm Score could be a house flippers' dream. Realm gives a home a score on a scale of 0-1000. As part of this analysis, Realm then tells you how much your home score increases based on certain projects. For example, a house may get a score of 505 as is, while Realm could recommend a kitchen renovation to add 30 points or an attic conversion to add another 25 points.
The big questions
All of these features mentioned above would be of extreme value to a single-family owner or prospective buyer if it is accurate. But how do we know that it is? A $3 million capital raise is a step in the right direction towards building an accurate platform out of this dataset, but one would imagine that there must be a lot more work to do.
Something like this would also clearly be of interest to the Zillows, Redfins (NASDAQ: RDFN), and OpenDoors ((NASDAQ: OPEN) of the world. All of those companies are well funded and could benefit from this type of technology.
Zillow has already demonstrated that it's acquisitive, as it recently acquired ShowingTime for $500 million. That acquisition demonstrated that Zillow wants to control as much of the customer journey along the homebuying process as possible. Is technology like Realm’s something Zillow would try to acquire down the line?
One would think that iBuyers like Opendoor, Zillow Offers, or Offerpad already have technology like this in-house. If that is the case, Realm is essentially stripping out this feature and offering it directly to homeowners and mom-and-pop house flippers. Perhaps this type of technology will help potential sellers hold iBuyers accountable in the future.
The Millionacres bottom line
The information that Realm provides is clearly of use to a prospective homebuyer or single- family investor. That being said, Realm will have to prove the accuracy of the data before any serious adoption of the technology occurs. If it can pull it off, I’d expect you to hear the company's name come up again.