Hombaez: Building an AI-Powered Future for Self-Represented Home Buyers

Written by:

Rudi Davis

Date:

16 Dec 2024

Share

Share via Facebook

Share via Linkedin

Share via X

Copy to clipboard

As the real estate industry grapples with the aftermath of the NAR settlement and commission restructuring, one startup is positioning itself to revolutionize how the next generation purchases homes. Hombaez, led by CEO and co-founder Nik Mercado, is developing an AI-powered platform that aims to make home buying more accessible and affordable by enabling self-representation.

With 12 years of industry experience spanning traditional brokerage, prop-tech, and Zillow’s iBuyer program, Mercado identified a critical opportunity in the wake of changing market dynamics. “Home buying has become more unaffordable for particularly Gen Z and millennials, and especially minority home buyers,” Mercado explains. “With the new NAR commission decoupling, that makes home buying even more difficult.”

Hombaez’s solution combines innovative search features with AI assistance to guide buyers through the entire purchase process. The platform includes unique elements like group search technology – allowing partners to search together and match on preferred properties – and a Tinder-style swipe interface for home browsing. Their AI assistant, dubbed “Sarah” (Smart Artificial Real Estate Agent), aims to handle everything from search to closing.

“Our goal is to bring 80% of an agent’s value for under 20% of the cost,” Mercado notes. This approach could prove particularly timely as the industry undergoes transformation. With 37% of Gen Z and 47% of millennials unable to buy homes within their budget last year, the need for cost-effective alternatives to traditional representation is growing.

The platform, which has attracted 4,000 users in its initial months with an average daily usage of 15 minutes, represents a direct challenge to established industry models. “A lot of the models out there, whether prop-tech or traditional brokerage, their business models really depend on broker-centric commission practices,” Mercado explains. “If they switch their business model, it really undercuts their revenue.”

Bootstrapped since inception, Hombaez’s development has been driven by a small but experienced team, including Mercado’s brother as CTO and partner Patrick, collectively bringing over 30 years of real estate experience. The company is currently seeking investment to accelerate growth and development of their technology.

Looking ahead, Mercado envisions a dramatic shift in real estate transactions. “Technology is just so powerful, and I really think it’s going to dominate,” he predicts. “The agent and brokerage roles are going to significantly change, and people underestimate the power that, especially AI technology, has today.”

The company’s strategy extends beyond just connecting buyers with properties. Hombaez plans to generate revenue by facilitating connections with local service providers – from mortgage lenders to inspectors and title companies – creating a comprehensive platform for self-represented buyers to manage their entire purchase process.

“Real estate is very, very local,” Mercado emphasizes. “You want somebody who’s a local financier, you want somebody who’s a local inspector, you want somebody who’s a local escrow and title company. What that does is it opens a lot of geo-targeting for local companies to offer their services.”

As the industry continues to evolve, Hombaez’s vision of AI-powered, self-directed home buying could represent the future of real estate transactions – particularly for tech-savvy younger generations looking to enter the housing market. With traditional brokerages potentially struggling to adapt their business models to the post-NAR settlement landscape, platforms like Hombaez may well be positioned to fill the gap.