Keller Williams, the sprawling national real estate franchisor, plans to launch an instant offer service later this year, another indication of the future path of residential real estate transactions. The embrace of a technology-driven approach to buying and selling by the brokerage most keenly associated with real estate agents points more to the increasingly blurred lines between the two approaches than to an affirmation of one over the other.
In May, Keller Williams will launch Keller Offers, a company spokesman confirmed to MarketWatch. The real estate industry has long expected such a step from the company, and founder Gary Keller teased it in a closely-watched public appearance last year, but this is the first time it has been officially reported.
Keller Offers will initially launch in the Dallas/Fort Worth market, and expand to six to eight “major” markets by the end of 2019, it said. The company plans to spend $100 million on instant offers in 2019, and noted, “We see iBuying as an important additional offering for our agents to offer to home sellers.”
That announcement comes just days after the leading pure-play iBuyer, Opendoor, announced a new initiative it calls the Opendoor Agent Partner Program . Taken together, the steps show the big players of an industry in flux experimenting with ways of being all things to all consumers.
“We’re looking to partner with highly-rated, trusted agents who we can pair with home buyers and sellers when it is the customer’s best option,” the company said. “To start, when someone requests an offer on their home from Opendoor but it’s outside of our buy criteria, our brokerage will refer them to one of our Agent Partners. Not only will this give homeowners peace of mind knowing they are in good hands, but it will provide a new way for agents to build their businesses with high-intent, high-converting buyers and sellers.”
That was precisely the path taken by Zillow /zigman2/quotes/204413973/composite Z +3.64% /zigman2/quotes/205077794/composite ZG +4.00% when it initially launched its iBuying program, Homes. “If you’re thinking about Zillow doing ibuying and you’re not thinking about seller leads, you’re thinking about it the wrong way,” Mike DelPrete, one of the leading independent analysts of the iBuying space, told MarketWatch last November.
But Opendoor’s pivot comes just two months after Zillow announced plans to double down on iBuying for its own sake, not just as a lead generation machine.
DelPrete and many other observers think instant offers are likely to become the new first step for any homeowner considering selling.
“It’s like the new Zestimate,” DelPrete said. “That’s why Zillow had to go into this game. For the past decade Zillow has been waiting for an opportunity to really disrupt real estate. Their traditional model was media. That’s not disruptive. They were just waiting, waiting, waiting. Then Opendoor and the other iBuyers came and it was like, here we go, this is the best thing we’ve seen. It’s risky and it’s going to take huge investment but given the situation, our core business is slowing down and if 20% of sellers are getting an instant offer, shoot, we have to do this. In typical Zillow fashion they’re all in.”
Zillow may be all in on iBuying, but they’re hardly out of the older business lines.
“With the consumer as our North Star, the investment in Zillow Offers complements our commitment to our Premier Agents,” CEO Rich Barton said on an earnings call last quarter. “We know most sellers would likely not choose to sell their house directly to us via Zillow Offers, yet it’s our mission to get everyone seamlessly into a place they love and can afford. Our partner premier agents are not only necessary in fulfillment of this mission, they’re fundamental.”
For the upstart iBuyers, the goal is a lot more focused, for now. Agents may play a role, but “the vision is to make it simple and instant to buy and sell your home,” said Dod Frasier, Opendoor’s vice president of capital markets. “When you look at the process today, it’s filled with uncertainty and pain points, and all these different people who have to get coordinated. We make it a few simple clicks. Our goal is to give you a fair value for your home.”