Selling or buying a flat is not something you do every day. That’s why one’s first thought is to find an estate agents to manage it all. However, if you’re a buyer it means factoring in commission that is usually between 3% to 5%, which could be as much as 15,000 euros. The alternative is to go it alone, private individual to private individual, but knowing that you will have to deal with an avalanche of paperwork.
This is where Housfy comes in, a startup that in the words of one of its founders, Albert Bosch, works “as a technology platform for private individuals to buy and sell property and that ensures the product can be sold.” Its strong points are that there is no commission, the interested parties deal directly with each other, it makes sure all the checks are done, it guides both parts through the legal process and provides advice. In short, it aims to provide the “digital buying and selling of flats.”
The same service, but better
The cost of putting a flat or house on the market with Housfy is 2,408 euros with tax, a figure well below the commission demanded by traditional agents. This is possible thanks to a business model that is totally different from how things are usually done.
“A neighbourhood estate agents deals with between 10 and 20 flats a month, but all of them are in the local area. We already have 120 buildings and we work in Barcelona and Madrid and their metropolitan areas,” Bosch points out. “What’s more, we try to be totally transparent and only act as intermediaries between two private individuals, because it is the buyer who makes the visits, not us.” Another stand-out feature is that they do not calculate the value of the building according to their experience, but rather by basing it on Big Data: “We know which flats have been sold or are being sold in every street in Spain as well as their price, so we can scientifically calculate the value of what you want to sell.”
“When it comes to buying a flat, you could be making the worst purchase of your life and certainly the most expensive"
Moreover, in the case of a buyer they are give advice on the areas where property fitting their desired characteristics are to be found and that perhaps they had not considered. For 90% of interested parties it is the first time they have bought a flat, says Bosch, which means private individuals look in very limited areas and without enough knowledge of the market or the legal and bureaucratic processes that go with the purchase. “When it comes to buying a flat, you could be making the worst purchase of your life and certainly the most expensive, which means you have to be completely sure about it,” he insists.
Getting mortgages easier
To get a standard mortgage, the buyer needs a deposit worth20% of the total price, to pay 10% in costs and show that the monthly payments are not more than 25% of their income. That is difficult for many.
Then there are riskier cases, those who need almost 100% of the funding because they are self-employed or do not have a permanent work contract. The bank will reject these applications, but they can be obtained with Housfy. “We work directly with the bank branches to get them to accept. We can bring them five or six mortgage applications at once and as only one of them might be risky, they grant them because the level of risk is low. If the private individual were to go alone, they would have been turned down,” says the cofounder.
A sector on the downturn?
In 2016, a total of 450,000 flats were sold. It seems like a high number, but does not equal even half of the operations in the boom years of Spain’s property market, when the high point reached 980,000 sales. However, the situation is favourable. At least that is how Bosch sees it, who says that the fall in unemployment, low interest rates and rising rent prices are the reasons why buying a property is now attractive.
In fact, in their four months they have seen that the potential buyer is between 35 and 40 years of age and a person growing tired of renting when the monthly payments could go towards paying off a mortgage. “They are people who are renting and who are suddenly seeing their rent go up by 200 or 300 euros. They see that with the same money they could buy their own flat and so are deciding to take the plunge,” he says. He predicts that the number of 15,000 flats sold in Barcelona in 2016 will continue to rise, with Poblenou and Eixample being the areas where property sells the quickest.
“Traditional agents are specialising like travel agents did”
To all of this needs to be added the property sector’s move into the digital world. “Traditional agents will specialise, like travel agents did,” says the cofounder, “you now buy plane tickets on the Internet and you only go to a professional when you want to go on a safari in Africa or plan a honeymoon; in property we will begin to see agents for luxury property, large country houses... singular products.”
Nor does he see a future in the segment for property websites, where he says “everything has already been sold.” “Before there were classifieds in La Vanguardia and estate agents and then websites appeared providing an alternative for posting ads. We still have the same players as 20 years ago, but we are the alternative and Idealista, Fotocasa and Habitaclia have become the equivalent of the classifieds in the newspaper,” he concludes.
The experience of starting a digital business
Albert Bosch used to be CEO of Groupalia and Miquel A. Mora, the other creator of Housfy, was a partner and cofounder of Yaencontre.com. “I used to be in one of the first five companies in the digital sector and Miquel spent 15 years in one the main property companies in the real estate market. We complemented each other quite well,” he says. Two positions in two companies that allowed them to gain fundamental knowledge so as to embark on this new project with confidence.
"The leading company will be very large. And we have to do everything we can to make sure it is us”
The team made up of 13 employees is at a stage of full growth and expecting to make a significant leap forward in the coming months. Bosch knows that they are in a segment of the market in which digitisation will mean there are few players and only one leader: “The leading company will be very large. And we have to do everything we can to make sure it is us.”
Thus they highlight the advantage of being one of the startups incubated at Nuclio Ventures, founded by business angel Carlos Blanco: “A lot of companies like Housfy will spring up and to stand out we have to have a lot of levers. You need a team, a platform that launches you, access to good investors... and all of that we have with Nuclio”.