Bluebid Homes hopes to connect homeowners and sellers who haven’t yet listed with an agent to conduct a private sale.

Can you mine new housing inventory and leads for real estate agents from homeowners who haven’t yet made the decision to sell? 

That’s the concept behind Bluebid Homes, a startup that launched its new home-bidding service across Massachusetts last week. 

The concept is relatively simple. By showing homeowners real offers to buy their home in the years leading up to when someone typically sells, Bluebid co-founders Chris Mackey thinks the company can induce them to pull the trigger on a sale. 

But the company must first change over a century of habit ingrained in American consumers that selling a home requires listing it with a real estate agent, first. 

By targeting its ads at homeowners who are likely to sell, Bluebid Homes hopes to unlock additional inventory at a time when few homeowners are willing to put their property on the market.

Private Sales Brought into Open 

Mackey, Liliedahl and their team of five other staff have built a platform that superficially resembles listings portals like Zillow or Realtor.com.  

A prospective buyer who dials up the Bluebid site is presented with a map of their desired area – for now, just Massachusetts while the company field-tests its concept – populated with blue dots, reach representing a house whose owner has “claimed” it. Like claiming a listing on traditional portal sites, this allows a homeowner to edit the information that Bluebid culled from public assessors’ databases, but also indicate that they’re interested in receiving unsolicited offers from strangers wanting to buy their house. 

The ability to make offers on a house that hasn’t even gone on the market should be a compelling idea to many buyers in the current inventory environment, Mackey said. 

“We think the buyers on our platform are highly motivated. They could have been forced to the sidelines by the disconnection between supply and demand. They could be buyers that have their eyes on a particular home, or neighborhood, or school district or town,” he said. “They have a motivation to put their best foot forward when it comes to an offer.” 

These offers are presented to owners anonymously, with the option of agreeing, rejecting or countering. If the owner likes the offer and the two sides have an agreement in principle, Bluebid introduces them and offers to pass the deal-in-waiting off to a local real estate agent to carry out the transaction and handle detailed negotiations on a dual-agency basis. Bluebid will then take an industry-standard 25 percent cut of the agent’s commission on any final sale, Mackey said.  

Mackey said the company is giving preference for these leads to agents who sign up with it earlier. 

Buyers who’ve already teamed up with an agent before making a winning offer on a home through Bluebid’s portal will have to independently work out an arrangement with the agent that buys the lead from Bluebid, but won’t be forced to work with them.  

“We think we can be the single-best provider for those top-of-the-funnel leads for real estate agents around the country, full stop,” Mackey said. 

And by using data about how often people typically sell their home, Bluebid also plans to target homeowners likely to sell but who haven’t yet put their homes on the market with ads encouraging them to claim their homes on its platform. It could, Mackey said, potentially generate more inventory for sale at a time when few owners seem willing to put their property on the market. 

By targeting its ads at homeowners who are likely to sell, Bluebid Homes hopes to unlock additional inventory at a time when few homeowners are willing to put their property on the market.

Will Approach Earn Best Prices? 

Industry veterans interviewed by Banker & Tradesman found some merit in Bluebid’s concept. 

“The home selling process sucks, and anything you can do to improve that is good. There’s some value to that,” said Rob Hahn, a Las Vegas-based analyst, Realtor and publisher of the Notorious Rob real estate blog. “You’ve to make repairs, stage your house, pile all the kids into the minivan and drive them around during a showing.” 

But by not listing on the open market, Hahn said, a seller may not get market price. Mackey confirmed that Bluebid won’t provide the homeowner with or make any public estimate of what a house might be worth, even if it may suggest staging tips and other ways to maximize a home’s appeal down the line. 

“A multiple listings service has been proven time and time again as the way to get your highest and best offer,” said Ryan Castle, CEO of the Cape Cod & Islands Association of Realtors, which operates the state’s second-largest MLS. “MLSs are transparent and efficient marketplaces. I think people forget how efficient the market is.” 

Off-market listings, where properties are privately marketed among a closed network of agents and their select customers, have also been controversial among Realtors for years. Many say that the practice amounts to a breach of fair housing laws and an ethical lapse by the seller’s agent in not letting the largest number of buyers see a home. The National Association of Realtors tried to crack down on the practice in recent years with its Clear Cooperation policy. Many MLS associations not affiliated with NAR also ban their participants from taking part in off-market listings. 

MLS Rules Not a Factor 

On a technical level, Bluebid sidesteps these issues by not hosting any actual listings on its platform, Mackey said, and by not being an MLS participant. Keeping bidders and sellers anonymous also guards against fair housing violations and homeowners will also be able to delete their homes from Bluebid’s platform. 

But Mackey also maintains that Bluebid’s service can actually improve the result a buyer gets from the traditional listing process as they test the waters and list “with more data points, and more market feedback.” 

“I don’t necessarily disagree with them,” Mackey said of agents who point to the MLS as the best path to finding a seller the highest price. “What I do is point to what’s happening today: 11 percent of all deals are not on the open market.” 

Hahn, the analyst, compared Bluebid’s model to a Zillow feature the company quietly eliminated when it joined multiple listings services in recent years. Called “Make Me Move,” it allowed homeowners to name a “dream price” for their property that would get them to potentially sell their home. The company only sporadically released statistics about the feature’s success, but an October 2012 press release noted that at the time, the company had over 147,000 of these properties in its database. 

“[Off-market and private sales are] a big enough space that this has to be the primary focus of a viable competitor,” Mackey said. “This is our lane and we’re going to stay in it. It deserves its own software and provider and technology infrastructure. I don’t necessarily believe Make Me Move is the right comp – [Zillow] was doing too many things.” 

Consumer Habits Ingrained 

Perhaps the bigger challenge Bluebid faces is in reeducating consumers about how they list their home, even if most sellers know five or even 10 months in advance that they plan to sell. 

“For us the hardest part was having a seller understand that you could let people know you were thinking of selling your home in advance,” said Wendy Gilch, a Pittsburgh-based entrepreneur who founded Selling Later, an online community aimed at connecting future home sellers with prospective buyers, in 2019.  

Selling Later has since pivoted to building tools to promote affordability and transparency after Gilch’s experience building the company left her convinced the real estate industry needed to refocus on consumers. 

Mackey said he wants homeowners to eventually use Bluebid to “check on your home the way you would with your 401K or your Charles Schwab account.” 

“It’s for responsible homeowners who want to know how much their home is worth, day in and day out, because your home is only worth as much as someone will pay for it,” he said. 

If you’re not the sort of person who sees your home as an asset to be managed as assiduously as your retirement savings, Bluebid offers another benefit: the privacy of never having to put up a “for sale” sign or otherwise have your home show up on a public MLS. 

James Sanna

Mackey said Bluebid is engaged in a social media and direct marketing campaign targeted at homeowners likely to sell, which helped the number of claimed homes on the site to jump from dozens at launch – mostly owned by “friends and family,” he said – to over 200 across Greater Boston within 48 hours. He takes inspiration from the over 40 million homeowners Zillow was able to convince to claim their home on its site as of 2013, when the company stopped publishing data on the topic. 

For now, Bluebid is self-funded following Mackey’s successful exits from past tech companies, and is using Massachusetts as its test market before seeking venture funding.  

But even if it can’t, on its own, induce more homeowners to sell in private sales than are already doing so, Bluebid could still be a success. 

“Whether or not we grow that pie of 11 percent [of all home sales made outside an MLS], there’s plenty of meat on the bone for our business,” Mackey said.