What is Doorsey?
We explored Doorsey, the new way to buy and sell houses. Here’s what we found.
This is not a paid promotion. We took an objective look at the company and are sharing our opinions only.
What is Doorsey?
Doorsey is a new online residential real estate marketplace. Their tagline of "Know exactly what you’re getting and how much to pay before making an offer" seems intriguing and refreshing in a world of real estate where everyone, buyers, sellers and agents alike, are not motivated to share information.
The platform itself is familiar, with some interesting twists. First of all, sellers and agents who list a home for sale on Doorsey get what you’d usually expect from Zillow; efficient systems for uploading listing data (we aren’t sure how nicely their platform integrates with various MLS systems), lead generation, and scheduling buyer showings.
When a new listing is published (for a fixed fee) by an agent or seller, Doorsey includes a fancy Matterport 3D virtual tour and gets a inspection done on the property by a local, independent inspector.
But Doorsey isn’t a listing platform. It’s an auction platform.
Once a listing “goes live” on Doorsey, the seller decides on what terms they would accept and an auction date is set by the seller. Prospective buyers not only have full access to the listing information but also see the inspection report, other documents provided by the seller (like HOA and tax information) without having to talk to an agent.
We checked one of Doorsey’s current listings in Texas, and were pleasantly surprised at the amount of information available
Buyers then have a window of time to review all the listing information and talk to others on the platform about the property before bidding at auction.
Doorsey says the purpose for all this is to do away with the whole blind offer business that causes so many problems in the real estate industry. We can relate to that frustration. In places like Los Angeles, where it’s not uncommon for sellers to go back and forth between prospective buyers individually, until they reach the “best bid” of sorts, it’s blatantly obvious that there is room for improvement in the offer process.
When auction time comes, buyers end up competing only on price, as most
all of the other terms are the same for everyone. The winning bidder and the seller then move to contract. Currently Doorsey cannot facilitate the escrow and closing process on their platform.
Who started Doorsey?
From the Doorsey website, “Doorsey co-founders Jordan Allen, Nick McLain and Matt Melville are seasoned home buyers and sellers who experienced first-hand the frustrations of the traditional blind-offer process in the overheated housing market of Spokane, Washington. They conceived of Doorsey as an antidote to the heartache of a process where buyers lack visibility into whether their offers are competitive, and sellers lacked confidence that they are getting the best price for their homes.”
We had the opportunity to speak with Jordan and Nick recently about Doorsey. Jordan was CEO of StayAlfred, a short-term rental platform that closed up shop early in the pandemic.
How is Doorsey different from other platforms like Redfin?
Doorsey is different from listing platforms like Zillow and Redfin in a few critical ways.
Doorsey is an auction platform, not a listing site. This have a few positive consequences. Agents are disincentivized from listing “dead” deals as a means of generating leads. By doing auctions, Doorsey also does away with the blind-offer process.
requiresmore transparency from all parties. By requiring inspections and virtual tours, and allowing for sellers to share as much information as possible, buyers will be more willing to bid transparently (or at least that’s the hope).
While technically Doorsey is just another option when if comes to marketing houses for sale, we think they’ve done a pretty fair job of differentiating themselves and offering a “buyer-friendly” auction process.
Our take. Will home auctions solve any real problems?
Historically, we’ve always associated house auctions with bank foreclosures and court sales, where flippers and opportunists with deep pockets are scrambling to pick up a “good deal”. The idea that auctions could become a mainstream, accepted way of transacting is fresh, but largely untested as of yet.
In an odd twist, this is one area where the commercial real estate industry has lead the way ahead of the residential industry (usually it’s the other way around). TenX, the leading commercial real estate auction platform, which was started all the way back in 2010 (formerly auction.com) has surpassed a total transaction volume of $20bn and typically closes on it’s deals in under 60 days.
Will homebuyers find enough value in the ideas Doorsey is promoting to forever ditch the blind-offer process that relies so heavily on agents and other service providers? Probably
Will Doorsey be the platform that facilitates this monumental shift in the homebuying process? If they can eventually find a way to handle the escrow and closing process on their platform, then maybe so