You know the feeling when you have finally decided to sell your house and buy a new one. But as you start figuring out the right listing price and negotiating offers, the process gets way more complicated than you expected.

The stress keeps piling on as you deal with real estate agents, inspectors, attorneys, and movers. Moreover, the traditionally fragmented nature of the real estate industry makes the sale process even harder to navigate. Who do you trust? What’s the right price? Are you getting duped? All these questions have popped up in our minds as buyers or sellers at some point in time. The category can be taxing.

Witnessing all these facets plaguing buyers and sellers firsthand, we realized there had to be a better way to make the journey easier. And that thought came to life in the form of Ivy Homes.

But turning this vision into reality wasn’t easy. Convincing skeptics in the industry was a challenge. Traditionalists hesitated to embrace change, and it took patience and persuasion to break through their entrenched mindsets. However, as we showcased the tangible benefits of Ivy Homes—faster transactions, reduced costs, and an improved user experience—the tide began to turn.

In this article, we will take a closer look at the story of how we carved out a space for our transformative idea and developed it into the unique Proptech platform it is today.

The Problem: A Market Ripe for Disruption

Traditional home sellers and buyers face inconvenience and complexity. First-time sellers lack negotiation skills, while buyers grapple with pricing opacity, legal uncertainties, and quality concerns, making the process frustrating.
Here are some of the challenges each side faced.

Challenges Faced by Home Sellers:

Lack of Experience: First-time sellers often lack the necessary skills to negotiate effectively with brokers or channel partners.
Delayed Liquidity: Property sales typically take 9-12 months, causing financial strain and uncertainty for sellers.
Pricing Ambiguity: Determining the listing price is challenging due to unreliable pricing information, leading to discrepancies.

Challenges Faced by Home Buyers:

Transparency Issues: Homebuyers encounter significant disparities in purchase rates, with a 20% range in pricing per square foot for similar properties.
Legal Uncertainty: Buyers may face unforeseen legal issues associated with the property, leading to complications and additional costs.
Quality Concerns: Doubts about construction and interior work quality add to the uncertainty surrounding the purchase.

Given these persistent challenges, it was clear: the real estate market needed reimagining.

Developing a Data-Infused Solution

Our vision for Ivy Homes was a full-service marketplace that addressed these pain points head-on. Our core innovation hinged on leveraging data. We utilized publicly available transaction details from the Government of Karnataka since 2018 to build a robust Asset Valuation Model (AVM).

This has enabled us to offer sellers instant, data-driven offers, often with upfront payments of up to 80% of the property value, through our unique Agreement-to-Sell approach, alleviating prolonged illiquidity. This enabled sellers to streamline the process, freeing them from uncertainties.

On the flip side, we ensure transparency and trust for buyers, too. Our property evaluations ensure fair pricing, eliminating opacity prevalent in traditional markets. Additionally, we prioritize quality assurance, conducting thorough inspections before listing properties to ensure integrity and provide a seamless buying experience.

Driving Value From The First Transaction

At Ivy Homes, trust and quality are paramount. Traditional lifetime value (LTV) calculations may not directly apply here because the customer is not expected to buy homes repeatedly. We prioritize delivering exceptional experiences profitably, starting from the first transaction.

Our commitment to quality construction and meticulous attention to detail underpin our reputation, distinguishing us in the market. Offering add-on services like interiors or home loans not only enriches the customer experience but also bolsters revenue and margin for Ivy Homes.

Here are the 3 pillars that help us foster long-term value generation for renowned developers:

Prioritizing Quality Construction: Buyers prioritize builders with a proven track record of quality construction, particularly in older buildings.

Harnessing the Power of Referrals: Referrals, contributing 25-50% of new project sales, highlight the power of word-of-mouth in customer acquisition for well-known developers

Unwavering Dedication to Customer Satisfaction: Through dedication to quality, customer satisfaction, and strategic initiatives, we forge lasting relationships and foster sustainable growth in the real estate sector.

Architecting a Progressive Prop-Tech System

At Ivy Homes, while buyers readily understand our concept, educating sellers about our terms demands considerable time. We meticulously guide each seller through the process, which may extend transactions to a month. Additionally, the risk of mispricing apartments is a concern, possibly causing prolonged turnover and higher capital costs.
Here are some ways we try to mitigate these risks:

Data backedSelection of Societies: We carefully choose societies with reliable transaction data to mitigate risks.
Operational Adaptability: We adapt our resources in accordance with evolving sales and revenue dynamics.
Implement cutting-edge technology: We actively introduce innovative methods like 3D walkthroughs and self-visits to improve the customer experience while maintaining quality standards.
Unwavering Commitment: Despite challenges, our dedication remains steadfast in delivering transparent, efficient, and trustworthy real estate solutions to our clients.

Empowering Buyers and Guiding Sellers

Building a successful marketplace hinges not just on the core offering but on fostering deep customer engagement.

Here’s how we ensure a seamless journey for both buyers and sellers:
For Buyers:
Pre-Transaction: Explore properties with detailed walkthroughs and 3D virtual tours from home.
Property Visits: Dedicated representatives address concerns for informed decisions.
Post-Booking: Our legal and CRM teams provide constant support, streamlining transactions and facilitating services like home loans.

For Sellers:
Business Development: Our team guides sellers through the process, including pricing trends and legalities.
Document Assistance: We assist with paperwork and ease burdens.
Value-Added Services: We offer “Certified by Ivy” for sellers who are not in a hurry and are willing to wait longer to sell

Finding the Sweet Spot (PMF)

As an early-stage startup, we are still fine-tuning our value proposition, but we consider being able to sell fast and smart (profitably) to be a big indicator of inching toward PMF. Educating sellers about our innovative approach posed an initial challenge, but through clear communication and unwavering dedication, we overcame this hurdle. Our first sale in 2021 took just 17 days, showcasing the efficiency of our model.

However, speed was just one aspect; ensuring fair deals for sellers and offering great value to buyers while we also made money in the business remained our top priority. After successfully completing our first 10 transactions, most of which were done within a three-month timeframe, we realized we were moving in the right direction.

And some parting thoughts on the transformation of a traditional sector

At the end of the day, real estate as a sector is not repeat-driven. It is important that anyone moving into this industry understands that you need to be able to make your customer’s first purchase profitable for you. In this sector, the ticket size of the transaction is often the customer’s LTV. Some value additions like interior decoration/home loan support, etc., can be added as a bundled offer. The core product should independently be smartly priced. Keep your service quality and transparency high, and that should not be a challenge in today’s bullish real estate market.