I have been hearing all week long that something was afoot at North American Title Company, that a big announcement was coming Friday, and that there has been a lot of personnel movement as of late.

Well, comes word that North American is merging some of its operations with a Silicon Valley-based start-up that was created to disrupt and streamline the $15 billion title insurance industry with technology. It’s called fintech: computer programs and other technology supporting or enabling banking and financial services, and it’s one of the fastest-growing investment areas for venture capitalists.

The company is States Title, and the CEO is Max Simkoff. The two-year-old company’s motto:  “We believe real estate should be simpler, safer, and cheaper to buy, to sell, and to own.”

As we know, buyers use title insurance when buying and financing the purchase of a home. I have often wondered exactly what Title companies do, hence our own Lydia Blair has been educating us the last few months. (And then there are isolated, rare Title Company nightmares.) Basically, title agents scour public records to ensure that buyers (and lenders) avoid liens and ownership disputes on properties, and guarantee full ownership of a property.

But by using technology to scour public records, tech title companies could charge buyers less, which could also eliminate the use of title agents: industry experts say that could result in a 25 percent savings for consumers on title premiums.

Title companies are also highly regulated. So it was a pretty big deal when States Title, a California-based start-up, was approved by regulators this August. States was the first tech-focused title company to be approved in the Golden State. California’s insurance commissioner, Dave Jones, believes “new technology and more competition would help lower costs for consumers”.

“Title-insurance transactions are often labor intensive and suffer from delays,” Jones said in a statement. “States Title uses a digital platform which is data-driven and automates the process.”

(Speaking of disruption, just wait ’til blockchain hits the title biz.)

According to The Real Deal, the title industry has historically been dominated by four companies: Fidelity National, First American, Old Republic, and Stewart Information Services Corporation. Fidelity bought Stewart for $1.2 billion in early 2018. But Disruptors are creeping in:

But tech has started to play a larger role in the industry. The startup company Spruce recently raised $15.6 million, and Daniel Price’s OneTitle launched in 2014. OneTitle focuses on issuing policies, while Spruce focuses on acting as title agents. Price previously told TRD that he thinks title insurance “is at a major inflection point. This is an industry that has seen perilously little innovation for more than a century.”

North American, which was founded in Dallas, was acquired by national homebuilder Lennar Corporation last year and is a wholly-owned subsidiary.

Jump for the official release: (more…)


The death of journalist Jamal Khashoggi in Saudi Arabia has created a ripple effect in the financial world (photo courtesy Flickr).

Money is a funny thing. You never know where it has been and whose hands have touched it.

This week the SoftBank Vision Fund, $93 billion strong and investing heavily in local real estate start-ups Compass and OpenDoor,  has come under the microscope because Saudi Arabia is a major investor in the fund. And the Saudi Arabian embassy in Turkey is the place where American journalist and Washington Post columnist Jamal Khashoggi disappeared mysteriously earlier this month.

Now international and U.S. media reports are suggesting that Saudi Arabia’s Crown Prince Mohammed bin Salman, or members of his family or contingent, either had something to do with Khashoggi’s death or perhaps even ordered it.

Khashoggi was a loud critic of the Saudi royal family and culture. He went to the Saudi consulate in Istanbul to sort out paperwork for his upcoming wedding.

Okay, you say, how does this tie to SoftBank and Compass and Opendoor?

There is a growing fear that if the Saudi Royal family had anything to do with this man’s death and dismemberment, the financial community — especially in Silicon Valley, and maybe the real estate community — may pull back. I mean, even Dr. Robert Jeffress, the pastor of the 13,000-member First Baptist Church of Dallas, has condemned it and I’m not sure he even realizes the Dallas connections. 


Last week, Becky Frey, a 17-year veteran at Briggs Freeman Sotheby’s who once told me she learned the real estate craft from Ellen Terry herself, joined Compass.

“It was a really big, hard decision,” says Becky. “I watched Compass evolve over the year, and it was just a good match for our team. The Sotheby’s brand was a big part of my career, and I have friends everywhere with Sotheby’s.”

But it was, she says, like leaving home: “Briggs Freeman was family to me and always will be, but moving to Compass was just a business decision for the team.”

Becky’s migration now sets Compass Dallas’ total agent count at 168 licensed. Compass has taken ALL local brokerages by storm, part of the significant disruption in the DFW real estate market we expected given our growth and sizzling hot market, and as Wall Street set its sights on the real estate industry. Why? Because the U.S. real estate industry is huge: the total value of all homes in the U.S. increased in 2017 to $31.8 trillion, according to Zillow. At least $89 billion is Realtor commissions alone. And because the industry has so many separate sub-markets (mortgage loans, title companies, insurance, construction) many forsee a way to unite and leverage the entire supply chain to feed consumer’s growing demand for convenience and one-stop shopping, like the ibuying trend:

Venture capitalists are practically throwing funds at real estate-related companies of all shapes, sizes and flavors. Nothing is sacred — brokerage models, commissions, transaction management, bundled services like title and lending. You name it, someone somewhere is trying to change it, fund it, and ultimately, capitalize on it. Every aspect of the real estate business is under scrutiny. There’s just too much money involved for real estate not to be targeted by those with deep pockets — and big ambitions to stuff those pockets full of cold, hard cash.

Outsiders have been marching into the Dallas market at a steady stream for a slice of our market pie. According to RealTrends top 10 largest brokerages in the United States, ranked by closed sales volume for 2018, Compass is number 6, right under Pacific Union. But the report needs to be updated: Compass bought Pacific Union in late August. According to Inman, Compass has more than tripled its agent count and now has more than 7,000 agents. The company also expects it will hit roughly $34 billion in sales volume this year, more than doubling its 2017 sales mark of $14.8 billion. That figure could firmly place Compass, which launched around 2014 as Urban Compass in NYC, at No. 3 on the Real Trends 500 in sales volume, right behind NRT and HomeServices of America.

Right behind NRT and Berkshire Hathaway Home Services of America. (more…)

Looks like more Wall Street money is really flowing into the real estate business. And it also looks like there might be some synergies soon between Opendoor and Compass in the future…

On Thursday (while we were all glued to Washington, D.C.) Opendoor announced a $400 million investment from the SoftBank Vision Fund. 

Who is Softbank Vision Fund?

It’s a giant Japanese venture capital fund with $100 billion to dole out, and the company apparently really likes the real estate industry.

At Inman Connect San Francisco this summer, here is what SoftBank’s senior investor, Justin Wilson, said the company is looking for:

“When we look at businesses, we want to find opportunities of companies that are really leveraging data extensively and in everything that they’re doing. We want to invest in platform businesses,” he said. “When we’re putting hundred-million, billion-dollar checks behind these companies, they have to have the potential to be very large businesses.”

SoftBank invested early in Alibaba (a Chinese on-line company that is Amazon’s only global competitor), SoFi, WeWork, Compass and an Indian competitor to Uber called Ola. WeWork, as I mentioned this morning, is huge.

So what will OpenDoor do with this new dough? (more…)

I don’t know, maybe selling a home these days is just getting too darn complicated. All I know is that two,  three, and soon, four of these iBuyer startups are now in town and doing pretty well based on the philosophy that consumers in lower-priced homes are willing to forego some profit in order to get rid of it quickly and painlessly. And of course, real estate agents are involved — to a certain extent — but not in the way they have been traditionally. Most of the process happens online. With these so-called iBuyers, the role of the real estate agent is present but diminished considerably.

But never, never underestimate the big boys — starting next month, Realogy, the largest real estate company in the U.S., will begin presenting all-cash offers in as fast as one business day to Coldwell Banker home sellers who request them in Atlanta, Dallas, and later this year, Tampa.


Photo by: Trigaci Photography (www.trigaci.com)

It seems all the real estate disruptors are coming here, to North Texasthanks to our healthy market. That’s why, today, a real estate platform called Bungalo is launching in Dallas and in Tampa, Florida. Bungalo focuses exclusively on the home-buying process and aims to give consumers a digital, streamlined, seamless i-buying experience. Hear them out: I think they have a LOT to offer.

For perspective, we told you that Opendoor snapped up Open Listings, giving the Bay area home-buying startup access to selling homes to those clients, circumventing the traditional home selling process. Opendoor also chose Dallas/Fort Worth as one of their first markets. Now, the company is exploding with growth.

Then last week, Knock came knocking, in North Texas, kinda sorta offering the same services.

But Bungalo is a little different. It focuses only on the buying side with something we have never seen: a guarantee on the fixer upper.

Promising “the first real estate platform to bring every step of the home buying process together in one seamless digital experience,” Bungalo (no ‘w’) empowers buyers to search, tour, finance, make an offer and close on a home all in one place. Yes, I said TOUR. Talk about streamlined!

“We have built a web platform allowing buyers to search homes and almost a Turbotax-type method of buying — super easy, super transparent,” says Greg Stewart, Bungalo’s Chief Operating Officer. “We are finally taking the guesswork and hassle out of the home buying process.”

Here is the Bungalo difference: every home on the platform is purchased by the company before you see it, then inspected and meticulously renovated, which means buyers have assurance they are moving into an updated, cleaned up, modernized space. Bungalo is doing the stuff most buyers don’t want to do. Plus the company offers a one year warranty on the house, which should put a lot of first time homebuyers at peace.


Founding team at Opendoor

Opendoor, Open Listings, open sesame to way more disruption in the real estate world.

You know about the fast growing, fast-expanding home selling and buying company Opendoor. Launched in the Bay area in 2014, with Dallas as its second focus group city, OpenDoor has raised $645 million in equity financing, has $1.75 billion in debt, and plans to be in 18 markets across the country by year’s end ostensibly to wipe that debt away.

Opendoor takes all that private equity dough and makes instant offers on homes, based on an automated valuation system that determines home prices online, nearly instantly. Homeowners receive a cash offer and can move without the drudgery of selling their homes: no staging, no showings, minor repairs taken out of the equity. The AVM offers are usually lower than what a seller could fetch with a traditional marketing, but they are quicker and time, says Opendoor, is money. Many customers say the Opendoor offer is exactly what they were hoping to sell for. might prefer to pay 6.5 percent or more to Opendoor versus 6% to two agents to unload a home quickly and move on. People choose Opendoor because it gives them convenience and certainty of an offer and price, which gives them confidence to buy their next home. Opendoor also works with a certain price point of home: originally under $600,000 in Dallas/Fort Worth when they launched here, the company is currently only buying properties valued at $300,000 or less in Dallas/Fort Worth (temporarily) because they have so many properties here: 522 on the market.

On Tuesday, September 11, Opendoor made its first acquisition: it bought Open Listings, a discount, technology-based online brokerage with ready-made, in-house real estate agents and partner agents. The Los Angeles-based company launched in San Francisco in 2015 with the slogan, “Shop without an agent. We’ve got your back”. Now in most of California plus Seattle, Chicago, Austin and here in Dallas, the company offers on demand showings with minimal agent interaction, and in-house agents:

“We have different teams of agents that are focused on making the buyer’s experience as smooth as possible at each step, whether it’s researching properties, tracking down answers to specific buyer questions, helping buyers get pre-approved, providing on-demand showings, or fully supporting them from offer negotiations to closing.” 


I’m sure you caught the Dallas Morning News‘ recent declaration that the start-up discount brokerage Door, while on a tear, is not yet really fully disrupting the buying and selling of real estate.

At least not here, not yet. I’m off to Inman in San Francisco, so let’s talk next week.

But it’s interesting that the DMN even wrote about a topic that once might have seemed too “B to B” for a consumer newspaper. This confirms the vibes I got at NAREE last month: the consumer is now keenly aware of the changes in the Real Estate industry, which means they could be selling their home in a different manner: traditional agent commission split; flat fee brokerage, 100% commission model; a discount broker, like Door; sell the place outright to a cash buyer like OpenDoor or Zillow’s Instant Offer for less than they’d make if they messed with marketing, but get the deal done quickly.

There are many disruptors jolting the real estate marketplace, and we are finally feeling it in Dallas/Fort Worth:

The liquidity providers: OpenDoor and Zillow’s Instant Offer. benefit to consumer: quick cash.

100% virtual brokerages: eXp Realty, out of Bellingham, Washington. Benefit to consumer: happy, motivated, well compensated agent

100% commission models like JP& Associates, Realty One Group, HomeSmart, etc. Benefit to consumer: happy, super motivated, well compensated agent

Tech brokerages: Compass and Redfin. Benefit to consumer: happy, motivated agent, commission rebate (Redfin) traditional split (Compass)

Flat fee brokerages such as UK’s Purple Bricks, Door, OpenListing and ListingSpark. Benefit to consumer: flat fee for selling, savings to consumer

But don’t you “get what you pay for”? As Brad Inman puts it, “For a bigger part of the decade, Keller Williams was beating up on Re/Max, the Realogy brandsBerkshire Hathaway and the big indies. But now all of them are lifting their horns for new fights, with some well-funded challengers proving to be ferocious competitors.” Should we be afraid?