Updated August 14th, 2019
HomeLight is an online real estate agent referral service that uses data to match home buyers and sellers with top-performing agents in their area.
After giving HomeLight some basic information about your situation and goals, you’ll get an initial list of realtors with stats about their performance. From there, you can work with a HomeLight representative to compare agents, set up interviews, and choose the best match for your needs.
While HomeLight’s referral service is undeniably useful for choosing an agent, there are no financial benefits. For example, after picking an agent, sellers still pay a typical commission of 5% to 6% — or have to negotiate for a lower rate on their own.
In contrast, Clever will refer you to top-rated, local real estate agents and negotiate discounted commission fees on your behalf — saving you up to 50% on home selling costs.
Read on to learn more about HomeLight: how it works, pros and cons, and good alternatives to consider.
What is HomeLight?
HomeLight’s goal is to help home buyers and sellers efficiently make more informed decisions about which top agent is the best fit for them. Using local data sources, they’ve compiled lists of agents and can quickly provide information about local agents. Instead of researching online for hours, with HomeLight, you’ll have performance metrics on experienced agents near you in minutes.
To find a real estate agent, you can manually search through its agent directory (without many filtering options) or let its algorithm surface good matches for you based on zip code, price range, and property type. With their matching service, you’ll have performance metrics (number of sales, length of sales cycle, etc.) on experienced agents near you in minutes.
Now, in addition to making agent referrals, HomeLight also has a network of cash buyers for sellers looking for a quick sale and a pre-underwriting loan service to help buyers avoid issues with financing contingencies.
How does HomeLight work?
The basic premise of HomeLight is that it refers you to an agent based on highly specified criteria, thereby ensuring a better outcome for all parties involved. The initial process is similar for both buyers and sellers:
1. Provide Your Information for Matches
HomeLight starts by asking where you’re looking to sell or buy, what kind of property you’re looking for assistance with, your target price range, and your timeline. After filling out their survey and providing your contact information, you’ll get a list of five agents in your area.
The list will include the agents’ profiles and information about:
- Their brokerage
- Their response time
- Number of closed sales in your area
- Years of experience
- Total number of HomeLight clients they’ve helped
- How they rank in your area
In addition, for seller’s agents, you’ll see properties they’ve sold in your neighborhood, the amount over list they’ve gotten on deals, and their speed of sales. Details for buyer’s agents will also show how much they typically manage to save their clients versus list price.
If you’ve already found a perfect fit, you can contact them from this list.
2. Talk With a HomeLight Concierge
Within a few days, a HomeLight concierge will contact you to further refine your list of results. Over a call, you’ll provide more details about the type of buying or selling experience you want. You can discuss priorities like:
- Agents with lots of experience in my price range
- Agents who are good at negotiating
- Agents who will spend a lot of time with you (a great option for first-time home buyers)
The idea is to give the concierge as much information about your situation, preferences, and goals as possible, which helps them create a customized list of prospective agents that will be a better match.
3. Speak With Your Agents
Once you have your list, you can arrange to speak with these agents over the phone or in-person for a more in-depth interview before deciding whether to sign with them. You’re under no obligation to work with any of the agents HomeLight refers.
In fact, after the concierge has refined your list, your interactions with HomeLight are basically over. If you’ve found the right real estate agent, you’ll work directly with them from this point on. If you didn’t find an agent you like, you can continue your search on your own.
How does HomeLight Simple Sale work?
In February of 2019, HomeLight launched Simple Sale as an option for home sellers. If you’re looking for a fast, easy sale, you give HomeLight details about your house and it passes your information along to its network of vetted cash buyers. Any that are interested will make an offer on your home.
Unlike other online, quick-sale options, this can lead to a bidding war, getting you a higher price for your home. After 48 hours, HomeLight will present the highest cash offer to you. If you accept, after closing you have up to 60 days to move out.
Pros of HomeLight Simple Sale:
- Fast, all-cash offers
- Flexible move-out date
- No need to prep or stage your home
- Available nationwide
Cons of HomeLight Simple Sale:
- Currently only available for homes that are unlisted and off-market
- Unless you’re working with a realtor, it’s difficult to know if the cash offers are fair
What is HomeLight Fully Funded?
In July 2019, HomeLight announced partnerships with lending institutions that allow buyers to get “pre-underwritten” loans to better compete with cash buyers. Sellers often prefer cash offers because the transactions are almost always guaranteed to close. Deals with buyers who need a mortgage can fall through if the loan isn’t approved.
To establish you’re qualified for HomeLight Fully Funded, you’ll fill out a survey asking information about your income, price range, down payment size, monthly debt, etc. If you qualify, HomeLight sends you a pre-approval application from one of their partner lenders.
If the lender approves you, you can go through the underwriting process before putting an offer in on a house. Assuming all is in order, within 48 hours you’ll get a letter stating you’re “Fully Funded,” or that your loan is guaranteed to be approved.
The idea is that when you do put in an offer, it’s as good as cash because you can prove the bank will give you the loan. Without financial contingencies, these deals close in as little as three weeks once accepted. In the rare instance your loan falls through, HomeLight will refund your earnest money deposit.
Pros of HomeLight Fully Funded:
- Makes financed offers more appealing
- Guaranteed loan if approved
- No obligation to make an offer or take out the mortgage once Fully Funded
Cons of HomeLight Fully Funded:
- Currently only available in California, Colorado, Florida, and Arizona
- If your financial situation changes (i.e. open a new line of credit or change jobs), your loan is no longer guaranteed
- Unable to compare rates and choose your lender
Does HomeLight charge a fee?
As of this writing, all of HomeLight’s services are free for buyers and sellers. Agents cannot pay to be included more frequently in its recommendations, however, HomeLight’s partner agents do pay a referral fee of 25% of their commission if and when a deal closes.
Remember that HomeLight, at its core, is a source of information. While it doesn’t charge fees for access to the information, there are still costs you’ll be responsible for during the real estate transaction.
Sellers will still owe a traditional commission to agents they find with HomeLight. Buyers who use Fully Funded loans will still pay mortgage origination costs and fees to the partner lender.
What benefits does HomeLight offer?
If the prospect of having to choose between thousands of seemingly qualified real estate agents in your area is a bit overwhelming for you, HomeLight’s simplicity is a major draw. You can use the platform to search for and evaluate local candidates quickly and objectively.
Compared to other sites (like Zillow, for example), one of the biggest advantages of HomeLight is that agents can’t pay to advertise their services on its site. The only way to appear on HomeLight is to be a reliable, top agent.
Other benefits of the HomeLight services include:
- Speed. You can find agents in minutes, get offers on your home in 48 hours, and be pre-underwritten for a loan in a matter of days.
- Costs. Buyers and sellers pay nothing to HomeLight for its services.
- Aligned interests. HomeLight only collects a referral fee from agents if and when a deal is closed. This means it’s in the company’s best interest to recommend great agents who will help you meet your real estate goals.
What are the drawbacks of using HomeLight?
While HomeLight claims to have nationwide coverage, if you live in a small town or a more rural area, there might not be agents who fits your exact needs.
The company is undoubtedly investing time and energy into expanding its agent network, but options may be limited (or nonexistent) depending on where you’re located.
There’s also an inherent issue with data-based algorithms. The website’s analytics engine is primarily focused on sales metrics. While you can easily get a clear picture of the number of deals they close, it doesn’t provide insights into other key qualities like trustworthiness, personality, dedication, and communication styles.
In other words, the perfect agent for you could automatically be filtered out because they’ve only been in your area for a year or two.
The final drawback to using HomeLight is that its services end at the point of referral. Once connected with the agent, it’s up to you to evaluate the agent and negotiate commission fees. In other words, you get the connection, but no additional cost savings benefits like you would from other real estate agent referral companies.
As of August 8, 2019, HomeLight has 199 Google reviews with an average rating of 4.7 out of 5. On the review site HighYa, HomeLight also has a 4.7-out-of-5-rating (536 reviews).
For comparison, as of the same date, Clever Real Estate has an “Excellent,” 5-out-of-5-star rating on third-party review site Trustpilot (214 reviews).
Top Alternatives to HomeLight
For buyers and sellers who are looking for a top agent in their area who fits their needs, HomeLight is a great option. However, many buyers and sellers have additional priorities, like saving money throughout the real estate transaction. While HomeLight does provide other resources and services, none of them help cut costs.
One of the biggest costs for home sellers is realtor commissions. With a traditional listing agent, sellers are expected to cover both their agent’s and the buyer’s agent’s commission. This typically totals 5%-6% of the final price of their home.
According to August 2019 data from Zillow, the median home value in the U.S. is $227,700. Assuming that’s what the house sells for, the total commission would be approximately $13,662.
Like HomeLight, Clever only refers top performing agents in your area who work at major brokerages like Keller Williams and Century 21. Our Partner Agents offer their full services, but Clever has pre-negotiated lower commissions on your behalf. On homes under $350,000, you pay a flat fee of $3,000. If you’re home sells for more than that, the listing agent’s commission is 1% instead of 3%.
With a home of median value, you’d pay a total of $9,831 in commissions for a savings of $3,831.
For buyers, in 40 qualifying states, Clever Partner agents put money back in your pocket with a Home Buyer Rebate of $1,000 on homes over $150,000. If your home sells for over $500,000 you can get up to 1% of the sales price back. This money can help offset your closing costs.
We take the time to learn about your real estate goals so we can match you with an agent who has the specific experience you need and our referral services are free for buyers and sellers.
Want to learn more? Fill out this form or give us a call (1-833-2-CLEVER) for a free consultation. You can interview as many agents as it takes to find the right one for you, but there’s never an obligation to sign with any of our recommendations.
Top FAQs About HomeLight
Is HomeLight legitimate?
HomeLight is a well-reviewed company that works to help buyers and sellers make educated decisions about real estate. They do not charge for their services and strive to offer unbiased, data-based information to its users.
For those worried, there are hidden fees or costs with HomeLight, know they make their money through referral fees. Broker-to-broker referral fees are common in the real estate industry and benefit buyers and sellers because they encourage agents to pass along clients they are unable to help to an agent who’s a better fit.
Does HomeLight buy homes?
Currently, HomeLight does not buy homes; they are not an iBuyer like Opendoor, Offerpad, or Zillow Offers. They can connect sellers with cash buyers, however, through HomeLight Simple Sale.
In 48 hours, HomeLight present sellers with an offer on behalf of someone in their cash buyer network. If the seller accepts the offer, they go through closing with the cash buyer, not HomeLight.
Is HomeLight a brokerage?
HomeLight is a real estate brokerage, but the agents they refer do not work for the company. Each agent who appears on the site is a broker themselves or works for a brokerage that is not affiliated with HomeLight.
Because of its business model of collecting broker-to-broker referral fees from agents, HomeLight has to meet all the requirements to make it a brokerage. That does not, however, mean they have to have directly employed agents working deals.
How do I find the best realtor in my area?
The first step to finding a local real estate agent is defining what your needs and goals are. This will help you narrow down agents who don’t have the right experience and skill set. Consider how important the following are to you:
- A quick transaction
- Saving money
- Having local knowledge and experience
- Communication style
- Being able to sell/buy unconventional homes
Once you have a list of priorities, start your research online. You can perform a simple Google search or use an agent referral company (like Clever or HomeLight) that will return results tailored to your needs.