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Ownly CEO Jason Hardy discusses digitizing home builder sales and growing an e-commerce ecosystem

All across the country and North America in general, homebuilders are struggling to meet consumer home demand and provide better buying experiences to the market.

While construction and home building is an old market, with lots of legacy processes, one company is attempting to merge the Shopify-led e-commerce experience of the present with proven homebuilding methods of the past.

Founded in 2019, Ownly provides an e-commerce platform for home buyers to build, price and buy their homes online. The platform combines an ecosystem of service providers with homebuilder inventory to provide a digital homebuying experience and reduce friction when it comes to sales.

FinLedger spoke with Jason Hardy, Ownly co-founder and CEO, who explained the biggest hurdles with updating new construction transactions, ecosystem integrations and buyer approvals.

Q: First off, could you just describe Ownly and the services you offer?

A: Ownly is an e-commerce shopping cart engine for the residential real estate sector. We’re focused on new construction, but the best analogy that I could probably give you is that we’re trying to build the Shopify for real estate. The biggest problem facing the entire industry is a lack of trust and transparency. The new home buying process is literally the last B2C market to allow customers the ability to transact online and we’re trying to change that.

Q: What are the biggest hurdles there? Why is it taking so much to push through that barrier?

A: It’s really complicated. The customer journey and buying a home is wrought with a lot of friction and a lot of steps. There’s a lot of redundancies in the process of buying a new home, and I think the reason that hasn’t been solved yet is because of the complexities involved in the process. Those range all the way from building and pricing, similar to if you look at the automotive industry, we’ve been able to build the price vehicle for 20 years. Why can’t you do that with a home, and part of it is a lack of transparency from the industry, to be able to put pricing online and tell consumers actually what a home is going to cost them. The other part of it is really complicated as it relates to mortgage pre-approvals, KYC and identity. Then you go down the road to legal conveyancing and insurance and title transfer. It’s really complicated. We’re trying to build that unified ecosystem, both for the seller and for the buyer, to be able to have all of those friction points within the customer journey unified within one single shopping cart experience.

Q: Why did you set off on this journey and what was the catalyst for you deciding to embark on it?

A: I think opposite of a lot of tech founders that you’ve covered and proptech founders that have come to me over the past couple of years, I didn’t come from tech. I came from real estate. I spent my whole career 21 years until now serving the homebuilding and land development industry. So I was witness to this problem for years and no different than you, I saw the world around me innovating in digitizing buying processes, but this industry was just not doing it. Every other industry was taking the buying process and putting it online with trust and transparency. But this industry wasn’t, and so I watched it happen before my eyes for the past 21 years.

Actually to be honest with you, I was buying my first new vehicle. I had been driving the same vehicle for 13 years, and had never bought a new one, and then I went and bought a new one and I did the whole thing online. I remember walking out of the dealership saying, ‘Why can’t I do this with the home?’

It’s the single largest purchase decision that people make in their life, and so now I’m a guy in the tech and proptech world. I’m a bit of a green banana when it comes to my tech expertise, but I have a lot of industry knowledge and insight as it relates to the homebuilding and the home buying process.

Q: Like you said, it’s very complicated and there’s many different verticals. When you got started, what was your first point you wanted to tackle and what has the roadmap been like moving forward from that?

A: So to be honest with you, I wanted to move right to taking a home, putting it in the shopping cart like our logo, and allowing a consumer to go check out and buy that home. That was my dream. But in actuality, it wasn’t possible. 95% of the new construction market in North America, which is a $390 billion year market, doesn’t put pricing online. It’s almost like shopping on Amazon and finding that product that you really like, and not having a price. It’s saying call for pricing, and nobody’s really going to do that.

Unfortunately out of necessity, the first step that we created in the process was giving the customer the ability to build and price that home, and to be able to build it and spec it out and add the options and upgrades that you wanted. So at the end of the day you had a home in the community that you wanted, at a price point that you were willing to pay, and it actually could give you a final price. The first step of our platform that we built was our digital storefront, that allows the seller to essentially showcase all of their available real estate inventory online within a digital storefront, that’s all embedded within the home builders existing digital website experience. That was step one, and so that’s what we launched with seven months ago.

We’ve gone from zero to 12 customers in seven months, that are all using our online shopping tool, but that really isn’t the juice of the platform. The juice is actually what’s coming, which has the two critical pieces to it. The next piece is what we call “Ownly Verified”, and that’s the KYC and identity verification piece, which is a necessity when you’re buying a home. You have to prove that you are who you say you are. Number two, it’s the mortgage pre-approval. You’re not going to be able to go and say I want to buy this home, but you actually can’t qualify for a mortgage. And so, Ownly Verified is kind of the second step of our process, that we’re actually deploying this month to all of our customers on the platform. Step three is once the customer has obtained their mortgage pre-approval, they’ve done their identity credential verification, and it unlocks that customer’s ability to actually buy that home online. So you can make an offer, you can sign the purchase agreement. You can place your deposit on that home, and actually transacting that transaction with your legal—your title transfer and all the legal and conveyancing that needs to get done to bring that sale to a close, and all of that is all integrated into that one unified ecosystem that we’ve built with Ownly.

Q: Back to the first step when it came to getting builders on board. What were those early steps like and what did they look for?

A: No shock here. This industry is one of the most old school, archaic industries on the planet. So what was that like? When we built the MVP (minimum viable product) for the platform in the middle of 2019, we pitched it to 15 different home builders and I got 15 noes. Like, “No way, no chance, no way. I’m never gonna put my pricing online. You’re gonna kill my sales people.” There was a million excuses and reasons why people didn’t want to do this, and it was really the pandemic that expedited consumer demand for more frictionless online buying experiences. There’s no doubt about it, and it was no different for buying homes. It was really the pandemic that changed the mindset and the behaviors of these builders saying, “Geez, we need to do a better job at showcasing our available product and inventory online,” because people were fearing for their health and safety. They didn’t want to get into their car and go meet with 100 people at a show home, or a sales center and wait in line. They wanted to do their own research and due diligence in advance of speaking to a salesperson, and that’s the world that we now live in. People don’t want to be sold. Nobody wants to deal with a salesperson. I want to be able to educate myself, and then when I’m ready and I feel like I’ve got all the knowledge that I need to make a purchase decision, then I’ll go and buy it or speak to a salesperson once I’ve educated myself. At the beginning when we launched our MVP in the middle of 2019, the response was crickets. Nobody wanted anything to do with us.

It was really March and April of 2020 when the pandemic hit, where the builders that had said no to us seven months prior called us and said, “Do you still have that online shopping cart e-commerce engine?” I think there’s been a huge paradigm shift in the hearts and minds of the builders, but also in consumers. Consumers are demanding more frictionless shopping experiences, through demanding price certainty and transparency. And so I think the biggest challenge that we still face is this industry is still pretty old school. For every 10 builders that we speak to, nine of them are telling us “We’re not ready for it yet. Let somebody else be the first. Let somebody else be the guinea pig.” That is, unfortunately, the uphill battle that we still face. The majority of the industry is still very resistant to making a change, to being able to create trust and price transparency online, and it’s becoming a bit of a change management exercise. A lot of these companies have to really look at, and revisit their entire selling model and how they’ve been selling for the past 60 years. It’s changing and it’s hard to get big enterprise customers to innovate and change on a dime.

Q: What are the biggest challenges when it comes to KYC, pre-approvals and things like that?

A: We feel like we’ve solved that problem on both sides of the border, both in the U.S. and in Canada. I’m based in Canada, where we have what’s called FINTRAC verification that’s required, and so it’s KYC. It’s proving who you are and validating your identity. I think it’s really, really complicated, but what we’ve done instead of trying to solve every problem within that customer journey of buying a new home, we’ve actually gone and done a very Canadian thing and mimicked and modeled after the Shopify model to be honest with you. Instead of trying to solve every problem within the customer journey, we’ve partnered with the biggest and best leaders in those different disciplines of the customer journey.

For example, I’m not an expert in KYC, and it literally would take me years to figure it out and I’d probably die trying. So what we’ve done is we’re building an ecosystem, we’re building a marketplace that has all of these great integration partnerships embedded into Ownly experience. In the U.S., we’ve embedded Onfido, which is one of the leaders in North America for digital ID, and they’re fully embedded into the Ownly shopping cart experience.

In Canada, we’ve partnered with the third most trusted brand by Canadians, which is Interac, which is the foremost leading digital ID provider in Canada and fully embedded into our platform. I think what we’re doing, and why we believe we have an opportunity to really have some market dominance and leadership, is that we’re not trying to build every piece of the puzzle ourselves. We’re actually looking to partner with the biggest and the best integration partnerships out there and bring them into the Ownly shopping cart experience.

Q: Looking at that ecosystem, what are the next steps and what would you like to integrate within that journey?

A: Right now we take a customer all the way to signing the purchase agreement, placing a deposit, reviewing and signing disclosure documentation. The next part of our journey, we have patents in place for everything, from the KYC and the Ownly verification process all the way to signing the purchase agreement. We have three U.S. provisional patents in place as of last year, that kind of give us a bit of a defensible strategy as we move forward. By the end of this year, our objective is to actually be able to allow the consumer to take the sale right to close. So legal, conveyancing, insurance and title transfer are kind of next step for us.

The next piece that’s going to be really important for us has two major components coming up in the next 12 to 15 months, is going to be machine learning integration, which is coming up this year. The second piece that’s coming up is smart contracts and blockchain. It’s inevitable. Those are the two, I’d say Northstar pieces, of the ecosystem that are next on the block. Machine learning is going to be a big piece of being able to understand people’s buying behaviors, preferences and what people can afford and what they can’t afford. Based on how they shop, being able to make recommendations and being able to suggest lenders and brokers that are a good fit based on that buyer’s criteria.

Q: That leads itself to ask how you look at how you handle agents and brokers. Obviously that’s a big thing standing there, what do you think and how do you feel about dealing with that?

A: To be honest with you, there’s a reason why we’re focused on the new construction market. The opportunity in the U.S. and Canada is a $400 billion a year total addressable market. Globally, it’s a $4 trillion market opportunity. That’s just new construction. But I would say the question I get, is the same question all the time. Why are you not doing this for MLS or the re-sale market? It’s such a bigger market opportunity. You know, we are building a broker portal into our platform so we can be friendly, and working with brokers and realtors and agents. We don’t think that our platform is going to eliminate them. However, we do believe that in the current age that we live in, consumers are able to do a lot of the work that an agent, broker, or realtor was doing previously. Now consumers can do things on their own and they’re happy to do that research and due diligence on their own. One of the pieces that we’re releasing later this year in the fall is the Ownly broker portal, that allows brokers and agents to still be able to integrate with the platform and still be able to assist their buyers in making that buying decision.

Q: When you look at North America, what are the biggest differences between Canada and U.S. real estate and construction markets?

A: For us, we achieved market validation in the Canadian market relatively quickly. We’ve got a dozen customers. Some of the bigger home builder customers in Western Canada are on our platform now, and over the past 60 to 90 days, we’ve really had our sights set on the U.S. market. The Canadian market is about $17 billion a year, the U.S. market is $380 billion a year. We’re definitely focused on the U.S. market. I think a sweet spot for us is the middle market, regional homebuilders that exist. Of course the top 20 are great, and it’s going to take a big fish in the pond to stake their claim, and put that flag in the sand to say that this is the future and this is the way that it’s going. We know that it’s it’s not an if, it’s a when.

We believe that the time is now, consumers are looking to shop online. We’re really focused on the U.S. market, predominantly in the southern U.S. We’re focused on California, Texas and Florida as our primary market penetration areas. We think consumers are looking for this type of an experience. They’re looking to have a frictionless online shopping experience for a home. Some builders are already taking the leap and trying to build it themselves. People say, “Who’s your biggest competitor?” Honestly, our biggest competitor is the builders themselves. The big, publicly-traded and publicly-funded builders are trying to build this technology on their own, but we know how that story goes. You don’t typically see a big home building company that becomes a tech company. We think we have a distinct market advantage, and we’re very niche-focused on solving this one singular problem of the e-commerce experience, of being that shopping cart. I’m not trying to be Zillow. I’m not trying to be MLS. I’m not trying to be a homebuilder, but I’m trying to be the e-commerce engine that powers those marketplaces of tomorrow.

Q: What does your company and team size look like, and what are your growth plans there?

A: We’re a young, scrappy startup and we’re less than a year and a half into the mix here. We have a full-time team of 13. I’d say 60% of those are engineers. It’s a really important piece of the puzzle. But we’re 13 full-time staff, and our sales team is U.S. based. They come from the homebuilding ERP industry, so a lot of experience in software for the homebuilding industry. Everyone else is here in Canada. Our offices is in Calgary, and we’re opening up our next round of fundraising in the next few weeks, our seed round, and so we expect our team to probably double in size in the next kind of 60 to 90 days here.

Q: What are your big goals and timeline of things you want to accomplish this year?

A: We really want to deliver what we call that couch to contract experience, for both the sellers and buyers in 2022. And realize that vision of delivering Ownly Verified, and delivering the shopping cart checkout experience. That’s really our focus for this year. From a customer acquisition perspective, definitely getting one or two of the big builders in the U.S. to buy into this vision, and to really embrace it and deploy pilot programs across the U.S. That’s definitely on our radar, and we originally created the technology for single-family home builders. But what we’re launching in the next two and a half months here is our multifamily platform, which will be for condos, apartments and townhome type product. We think that from a global perspective, the larger market opportunity is most definitely in multifamily and not in the single-family category. Although I love single family, it’s a much more complicated purchase from a sales perspective. The growth and scale opportunities are most definitely in multifamily.

Q: Do you have any global thoughts for the future?

A: Our immediate focus in the next 24 months is conquering the North American marketplace and validating the model in the U.S. and Canada. But as we look forward, this problem is not isolated to the U.S. This is a problem that is a global challenge and a global opportunity. It’s a $4 trillion market opportunity globally. We want to be the e-commerce engine that is the transaction engine for all real estate transactions globally. It is very similar, no matter what country you go to, you can buy a home, whether it’s a condo or a house. We think that there’s a global opportunity here to create a more frictionless shopping experience, regardless of the market, the country or the region that they’re in.

In other recent proptech news, Sage unveiled its new property management cloud solution, Intacct Real Estate module. Belong also raised a $80 million mix of debt and equity led by Fifth Wall to expand its rental management platform.

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