I don’t know, maybe selling a home these days is just getting too darn complicated. All I know is that two, three, and soon, four of these iBuyer startups are now in town and doing pretty well based on the philosophy that consumers in lower-priced homes are willing to forego some profit in order to get rid of it quickly and painlessly. And of course, real estate agents are involved — to a certain extent — but not in the way they have been traditionally. Most of the process happens online. With these so-called iBuyers, the role of the real estate agent is present but diminished considerably.
But never, never underestimate the big boys — starting next month, Realogy, the largest real estate company in the U.S., will begin presenting all-cash offers in as fast as one business day to Coldwell Banker home sellers who request them in Atlanta, Dallas, and later this year, Tampa.
Realogy is the parent company of Coldwell Banker. The company says it may very well expand the cash offers program to more brokerages under its umbrella. Which is a whole lot: Century 21, Sotheby’s International Realty, Corcoran, and Better Homes and Gardens Real Estate, like our Judge Fite.
I always need a diagram to help me figure this out, but some Coldwell Banker brokerage offices are a subsidiary of NRT. But Realogy also runs some Coldwell banker offices as franchises — so confusing. The new program will be offered in the subsidiary Coldwell Banker offices (I’m actually waiting to double check this with Frank Obringer) and the funding to buy the homes is coming from some major heavy-hitters: Home Partners of America, backed by major investment firms like BlackRock and KKR & Co. Home Partners of America is not shy about the rent-to-own business, having been involved since 2012. Launched as a solution to the tight mortgage market back then, Home Partners of America purchases homes in 30 markets across the country, then leases the homes to tenants for an agreed-upon time frame, after which the residents may opt to purchase. They also partner with real estate brokerages, and thus the concept of dealing with a property that cannot sell will not phase them in the least.
But here is the GOTCHA: the program, called cataLIST Cash Offer — get it, a catalyst for selling your home fast — will only be available to and worked up by Coldwell Banker agents front and center!
Take that, Opendoor, Offerpad, and Knock! Oh and lest I forget, Zillow Offers!
How it works: fascinatingly similar to the aforementioned others. Sellers send their property’s basic information — square footage, bathrooms, bedrooms, age, general condition and repair needs — to a participating NRT Coldwell Banker real estate agent online, who will return an offer that day. Sellers have five days to consider the offer and accept or reject. If they accept, closing can be in 10 or 90 days, depending on property conditions. CataLIST will then makes the necessary repairs and market the home for sale online. Or lease it.
Remember, this is Home Partners of America, no strangers to being landlords.
As I suspected, the transactions will take place in homes of $550,000 and below in Dallas, $500,000 and below in Atlanta, and $450,000 in Tampa.
Suppose the seller says, “No way, Jose!” Easy. They will get the same advising agent who helped them evaluate their home as a listing agent and sell the good old fashioned way. I am assuming the advisory online agents are local. That seems like a win/win for Coldwell Banker Realtors, no?
This is a pretty gutsy move by Realogy, and I would fully expect to see it next from Warren Buffet. This puts the Big Guns right in competition with $2 billion valued Opendoor, Zillow, and the others (and the others to come). Realogy is valued at about $7 billion; Zillow $1.1 billion, correct me if I’m wrong.
Let us not forget that Opendoor works with local agents or experts — their own, and from other brokerages — even though some iBuyers like Purple Bricks claim the current real estate commission is too high. We have our own Door saying that, too. The Zillow model is slightly different as it refers the prospectives to its best customers, the Premiere Agents: the agents who pay the most for internet-generated leads.
“The cataLIST Program gives agents the distinct advantage of being able to offer their customers either the great listing experience they have long provided or an alternative to the common sale model, one that is convenient and expedites the home sale process,” said M. Ryan Gorman, president and CEO of NRT. “The cataLIST program keeps our independent agents at the center of the transaction and additionally arms them with a powerful tool to compete with iBuyer players in their marketplace.”
Ryan Schneider, Realogy’s new CFO, a former Capital One executive, told Inman in January he plans to leverage untapped real estate data and enhance the agent experience across a litany of brands as Realogy helps its 286,000 sales associates (Realogy’s affiliated brokerages operate around the world with approximately 192,000 independent sales agents in the United States and approximately 102,000 independent sales agents in approximately 115 other countries and territories) in a field that is disrupted almost daily by tech and Wall Street. The experienced agent will give a more personalized experience, they say.
Tracey Jeter, spokesperson at Home Partners of America, told Inman that the new cataLIST Cash Offer service is more personalized than simply taking a home off of somebody’s hands.
Clearly the real estate agent’s role will remain strong in this new Realogy venture, which MAY separate cataLIST substantially from the typical iBuyer models. After all, they are all competing in the same price bracket on homogenous housing stock that can be appraised by AVMs. Of course, Realogy and Zillow can go anywhere, not limited to the start-up markets. We shall see how the market accepts this concept coming from an established broker.
“Seems like a disaster for @realogy as a giant conglomerate not known for their nimbleness — which is required,” tweeted Real Estate guru/observer/appraiser Jonathan Miller. I texted him immediately after: game changer or not?.
“Whereas Opendoor was built for iBuyers,” he texted me. “Realogy is a large, multi-faceted real estate institution. Plus I only see Opendoor and the startups like them thriving in a market with homogeneous housing stock.”