Paris Dean is the founder of Sparen, a startup that seeks to streamline real estate transactions with automation and algorithms, making buying and selling homes faster and cheaper. Dean created the startup on the back of slow real estate transactions that are due to complex processes.
Prior to founding his company, he worked as an asset manager, overseeing hundreds of millions of dollars of mostly residential real estate. He told Shoppe Black that a big part of his job was searching for, communicating with, and analyzing information from the various parties required to facilitate transactions such as agents, title companies, insurance companies, inspectors, and contractors.
“It was like having to go on a scavenger hunt to find the pieces to a puzzle before you put the puzzle together,” he said. “At the time my mom was looking to buy a house, and it was twice as complicated: she used Zillow and Redfin to find properties; then she had to talk to lenders to figure out what she could afford to spend because seller’s agents wouldn’t take her seriously without a pre-approval letter; then she had to find a Buyer’s agent to get access to the property, which is a whole other process because not all agents are created equal; and lastly, she had to quickly submit her ‘highest and best offer’ before somebody else beat her to it.”
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Following the house hunt by his mother, Dean said he got frustrated more times because he could not figure out why the whole process was so fragmented and inefficient in 2017, when he could buy a $1 million car and had it delivered to him.
“I was looking at the whole process like ‘Why is it so hard to buy a house?? There’s got to be a better way to do this,’ and I couldn’t find one, so I started designing one,” the Detroit entrepreneur told Shoppe Black.
Generally, real estate transactions are made up of a series of processes, and each process requires data to be collected and analyzed. The majority of that data is manually collected and analyzed by people, which means lots of errors, Dean said.
“Our algorithms streamline and automate the data collection and analysis for the majority of the steps in real estate transactions, meaning people can get through transactions in a few days compared to weeks and months,” he explained.
Dean said he built Sparen to get rid of agents because he viewed them as destructive. However, upon speaking to several of them, he realized agents were not the problem but the standard 5 or 6 percent commission.
He adopted a different approach. According to him, instead of dismissing agents entirely, he built an internal marketplace of sorts where buyers and sellers can connect with agents on demand and get help with specific tasks for a flat fee.
“For example, if a seller needs help with staging, they can click a button and get connected with an agent who may charge $1,000 for a consultation. So while they’re not making their normal 3%, they’re also not overburdening themselves with every little facet of the transaction, freeing up a significant amount of their time.”
He continued, “Also, that agent may be able to provide that service 2 or 3 times that month. That’s an extra $3,000. In many cases, that would be more than their commission for significantly less work.”
Since its 2020 pilot program, Sparen has attracted a wide variety of buyers and sellers, including small flippers who sell 5 properties a year, investment banks, national home builders, the U.S. Government (DoD and HUD), two of the top 5 largest mortgage lenders, and the largest Black-owned Keller Williams brokerage in the country, Dean said.
Touching on the future of Sparen, he said he aims to make it the largest global real estate marketplace.
“I want Sparen to be as ubiquitous yet ‘invisible’ as Network Solutions and AWS. Anytime a property is being bought or sold, whether it’s someone in Texas selling their home themselves, an agent selling it in California, or a family buying their home from another family in Nigeria, I want Sparen’s technology powering that transaction.”
