Revenue Model AnalysisIntroducingRoofRing Real Estate Simplified.
RoofRing Revenue Model Analysis Revenue Pricing Payment Flow and Streams Model Projections RoofRing - We are with you for every step of the way
Revenue Streams Customer Segments and Market Analysis
Our Customers Sellers are home owners who plan to sell their home or any real estate. Buyers are customers who would like to purchase real estate.
United States Market Analysis Homes on Sale per year Average Price of Existing Home = - USA (in millions) $193K› Total Amount on Home Sales = $772 Billion per year Existing (4 M) Traditional Real Estate Agent Commission = 6 % (3% Seller Agent + New 3% Buyer Agent) = $46.32 Billion per (0.3M) year + Numbers based on past 5 year average (residential homes only) Sources: http://www.census.gov/const/uspricemon.pdf http://www.nahb.com/fileUpload_details.aspx?contentID=55761 http://www.realtor.org/field-guides/field-guide-to-quick-real-estate-statistics
Based on the data collected by the National Association of Realtors (NAR) in 2011 Buyer Stats: - First Time buyers are 37% and Repeat Buyers are 63%Real Estate Statistics - Primary information sources used in home search is Internet (88%) and Real Estate Agent (87%) For Sale By Owner (FSBO) Statistics: - FSBOs accounted for 10% of home sales in 2011. - Most difficult tasks for FSBO Sellers were: Getting the right price (12%), Understanding and performing paperwork (11%), Having enough time to devote to all aspects of the sale (6%), preparing home for sale (5%), selling within planned length of time (5%) More information from the source: http://www.realtor.org/field-guides/field-guide- to-quick-real-estate-statistics
Market AssumptionsFrom the market analysis, customer surveys and real estate statistics from the past years,RoofRing real estate services is planning to simplify and revolutionize the real estateIndustry saving thousands of dollars for our customers.Assumptions and Predictions:• In about 10 years, most customers will completely rely on efficient online real estate services that save time and money. RoofRing will significantly disrupt the traditional style real estate process and bring efficiency into this whole process.• › 25% of the market likely to use our services by end of year 5 => 1 million home sales per year by RoofRing
Revenue Streams• Services (Buying and Selling) Fees• Affiliate/Partner Revenue • Advertising • Lead generation to local businesses that support real estate industry such as remodeling contractors, architects, handy man services, home stores, hardware stores, landscaping services etc.
Now that we have some understanding of ourmarket and revenue streams, how are wegoing to price our services?
Typical Pricing Models - Cost + Markup - Not driven by customer insights Based on RoofRing’s Values - Money Savings - Time Savings - Efficiency Our Competitor’s Pricing Model - RedFin: Commission % - ForSaleByOwner: Package Pricing (< $1000) - Reaslo: Flat Fee $1000
It’s about what is best for the customer.We plan to experiment with following pricing options thatare commission basedCase 1: Seller uses RoofRing and Case 2: Seller and Buyer use RoofRingBuyer uses 3rd party agent Seller Seller pays Seller 3 % Fees to pays 2%pays 2% + third party Fees to Buyer Fees toRoofRing Agent RoofRing RoofRing RoofRing gives 1% gives 1% cash- cash- back to back to Buyer Buyer
Happy Customers!Case 3: Buyer uses RoofRing and Seller uses third party services FREE for Buyers! Plus 1% Cash- back Bonus!! ** Percentage commission/cash-back is off of final home price
Payment Flow andRevenue Projections Okay, so where is the money?
Seller RoofRing.com Payment Flow Buyer 3rd party real estate agent Case 1: Seller uses RoofRing; Case 2: Seller and Buyer Case 3: Buyer uses RoofRing; Buyer uses 3rd party use RoofRing Seller uses 3rd party Seller paysSeller pays 2% Seller pays Seller pays 2% up to 3% to up to 3% to Seller pays 2% Buyer Agent Buyer Agent 1% cash-back to 1% cash-back to 1% cash-back to Buyer from RoofRing Buyer from RoofRing Buyer from RoofRingOn a $500,000 home, seller saves $20,000 if he uses RoofRing;Buyer will always get 1% cash-back if RoofRing is involved in the transaction.
? What are our revenue projections? Think big!
ProjectionsYear Market Focus Target Number Total Market Average Home Revenue per year based of transactions (Average Price on 2% pricing model per year 2007-11) (Buying and Selling)1 Bay Area (US) 350(0.5%) 70,105 $414,071 2.8M2 Bay Area (US) 2103(3%) 70,105 $414,071 17M California (US) 4100(0.5%) 410,168 $258,275 21M3 Bay Area (US) 7010(10%) 70,105 $414,071 58M California (US) 20508 (5%) 410,168 $258,275 105M4 US 64500(1.5%) 4.3M $193,000 248M>5 Other Needs Needs Needs analysis Countries analysis analysisSources: http://www.dqnews.com/Charts/Annual-ts/CA-City-Charts/ZIPCAR11.aspx
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