Tech Startup: SQFT
Another level of service
Where: Boulder / Web: www.sqftx.com
founded: February 2014
SQFT CEO and co-founder James Simpson sold residential real estate in Beverly Hills before moving to Boulder in 2010.
“Here, things were a little bit different than they were in California,” says Simpson. He explains he showed houses when he was the listing agent in the Golden State, but Colorado’s “lockbox system” left something to be desired. “What’s the seller getting out of this for 3.2 percent?”
What that means is the industry is about to see a “big market correction,” he adds. “It’s time for a second tier of service.”
Simpson founded SQFT with Mark Kreloff and Andy Brandt in 2014. The company currently has 10 employees.
In a Nutshell
“We’re going to see a complete shift in how transactions occur,” says Simpson. Millennials “never want to make that phone call and the last thing they … want is that salesman rigmarole.”
In response, SQFT launched nationally in March with an app for smartphones and tablets that streamlines residential sales. Sellers post photos and descriptions and the app automatically syndicates it to all of the major real estate portals. Pre-qualified buyers can use the app to make offers and sellers can accept, reject, or negotiate at the press of a button.
“By allowing the seller to do a little bit of the heavy lifting, we can pass some of the savings to them in the form of reduced commissions,” says Simpson.
For SQFT users, that “correct” commission is 1 percent. There’s no listing fee, but sometimes the seller has to match the 1 percent for the buyer’s agent.
Says Simpson, “Sellers know what their home is worth, they can show their own home, and they know how to negotiate.”
Since the Colorado launch in February, SQFT had three homes under contract in a month and signed brokers to act as affiliate partners in more than 10 other markets as of March.
Enormous. “It’s a $2.7 trillion space annually,” says Simpson. In Boulder County alone, 12,000 residential transactions totaled $5 billion last year.
Simpson says SQFT has a target of 1 percent of transactions in its markets. In Boulder County, that would have been 120 deals last year. “It doesn’t seem like a lot, but when you roll it out nationally, it’s a big number.”
After an angel round in summer 2014 and a seed round that closed in February with investments from a pair of “Boulder institutional investors,” SQFT may pursue additional outside capital.