Real estate technology company Everhome Realty Inc. hopes to disrupt the home-selling business as a public company after entering into a definitive agreement with blank check holding company Alpha Wastewater Inc.
Everhome represents homeowners looking to sell, offering marketing packages for houses that are posted to the Multiple Listing Service, as well as management of contract disputes, negotiations and disclosures. Services also include professional photography for marketing packages, appointment scheduling, Bluetooth lockbox, professional yard sign and legal consultations. “We’ve simply taken a traditional real estate model and leveraged time and technology in order to create a better experience for home sellers,” David Bartels, Everhome’s chief executive said. “We make our money by listing houses the same way a traditional real estate agent, list those houses and then we get paid a success fee at the end of the transaction.” There are two differences between Everhome and a typical real estate brokerage. First, instead of charging a percentage from commission, which is typically based on the price of the house, the Westlake Village-based company charges a set fee of $3,950 at closing. Secondly, Everhome does not provide an agent to handle a home’s showings. Instead, Everhome customers take a do-it-yourself route to showings and open houses. Bartels said users need a local agent if they require someone to represent their home.
Housing crisis California’s housing crisis has occasioned steep gains in home prices and low inventory, among several other things. Bartels considers there to be a “very strong seller’s market” currently. “People are searching for an alternative to those percentage-based commissions, and we offer them a low flat fee, with the benefits of full-service representation,” he explained. “While everyone else is struggling to generate listings, we’re listing houses every day and putting houses in escrow every single day. Our business is just flourishing.” Venture capital firm MetaProp reported in its Year-End 2020 Global Proptech Confidence Index that the index was at 7.7 out of 10, the highest to date. According to MetaProp, “the acceleration of the adoption of technology in real estate caused by COVID-19 has created new opportunities for existing proptech companies, as well as an environment of innovation and growth.”Everhome’s $3,950 price point is a fixed cost regardless of the price of the house. Bartels said that the company has home listings in the $3 million range and as low as the $300,000 range. He added that the more expensive the house, the bigger the savings when using Everhome. Because of this, more expensive sellers have been more attracted to Everhome. Bartels said traditional real estate has used technology to sell houses faster with less effort to keep costs down. Bartels wanted to flip that use of technology when he founded Everhome. “What I really wanted to do was allow sellers to leverage that technology that had traditionally only been available to real estate agents but give them the full-service representation to handle the more onerous details, the more critical elements of the transactions,” he said. “We have done that and we’ve been proving it for months now and now it’s time to really hit the gas and see how we scale it.” Everhome is part of the proptech investment market, which had $7.3 billion of equity and debt raised through nearly 300 deals in the U.S. in 2020, according to GCA Corp., a global investment bank.Alpha reverse merger Everhome is Bartels’ fourth real estate startup. He said that his past experiences have given him skills in software development, customer experience and retaining talent, assets that he believes made the process of making Everhome a public company easier. Alpha Wastewater is a blank-check company which trades over the counter with the ticker AWWI that will purchase Everhome, thus making it public. The companies did not disclose the price or other financial terms of the transaction.
“As a public company, Everhome will have access to new capital to accelerate the company’s growth plans, including hiring, acquisitions, expanding monetization, and aggressive development of technology and services,” the company said in a statement. Currently, Everhome is licensed to conduct business only in California. The company’s move to go public, Bartels said, will help fund a fully national expansion in the short term via strategic acquisitions and organic growth. In addition to geographic expansion, Everhome aims to use funds from the transaction to increase the size of its sales, marketing, administrative and technology teams; increase engagement on its digital platform by making it easier and faster to engage, learn and list homes for sale; and increase platform monetization via the offering of ancillary services such as referral fees, full-service listing fees and full-service buyer fees.
Last year, the company weighed options of how to expand, make money and eventually go public. Everhome’s agreement with Alpha, which Bartels called a reverse merger, was decided as the best course of action. According to Bartels, Everhome did not think it would need to raise hundreds of millions of dollars to go public and believed other routes beside the reverse merger could have taken much longer. “We thought that (the reverse merger) was going to be a less complex process and give us a very effective way to get the funds that we need to do what we wanted to do,” Bartels said. “We wanted to get started more quickly and for me personally, I wanted to focus on the customer experience and growing the business, not spending most of my time at investor meetings.” Alpha Chief Executive Peder Davisson said in a statement that Alpha has been focused on partnering with “a cutting-edge, category-defining company with tremendous growth potential, a strong management team, and, importantly, a clearly defined mission.” He added that Everhome exhibits all those qualities and that Alpha looks forward to accelerating Everhome’s growth as a public company.
Web Broker’s Reverse Merger
