To all the agents in the house,
Amid Zillow announcing the wind down of its iBuying program, there have been major developments from companies not named Zillow that are likely important to where real estate is going.
Three big ones are:
*Realogy is getting serious about iBuying. Two weeks ago, the brokerage conglomerate named its first CEO for iBuying arm RealSure, Katie Finnegan, a former executive at Walmart and Rite Aid. Realogy is also "expanding its investment" in two-year-old RealSure, Realogy CEO Ryan Schneider said on an Oct. 28 earnings call.
RealSure is a partnership with HomePartners of America, which Blackstone purchased for $6 billion in June. HomePartners of America is Blackstone's latest investment in a company that buys single family homes in bulk and rents them out.
Finnegan told me that RealSure would partly rely on Blackstone's expertise in automated pricing models — Zillow had said their model was "too volatile" to responsibly continue iBuying.
Finnegan stressed that RealSure would work with Realogy partner agents, and give consumers the choice between a cash offer and putting their home on the market. In an interview with RealTrends, Sherry Chris, president and CEO of Realogy Expansion Brands, agreed with this assessment, as she says, it's a way "to offer added value and options to consumers."
Still, I'm curious what agents think of the largest brokerage in the country by sales volume entering the vexing iBuying fray.
*Redfin lost money again. The company posted a $19 million loss in the third quarter. CEO Glenn Kelman spent Redfin's earnings call last Thursday differing his company's comparably modest iBuying program with Zillow's runaway train.
"Redfin isn't an iBuying company at all; it's part of what we do, but it's not who we are," Kelman said. "The way we define ourselves is as the company that offers homeowners the most complete set of options for selling one home and moving to another, where iBuying is one of those options."
The Clyde Drexler of home listings to Zillow's Michael Jordan, Redfin has, like Zillow, tried to monetize its brand recognition to varying levels of success. Unclear is whether the company is doing enough to either eventually make money, or have its ideas — a national brokerage with salaried agents, for one — seriously revise the industry's status quo.
*eXp posted $24 million in net income for another profitable quarter. Like many brokerages, eXp is dipping its toes into diverse revenue sources, from a forthcoming mortgage joint venture to iBuying. But like other national brokerages, eXp's revenue comes mostly from their cut of an agent's commission.
The brokerage reported $1.1 billion in third quarter revenue, but that figure assumes 100% of eXp agent's commissions stay with the company. When commission costs and other related expenses are factored in, eXp posted $110 million in quarter three revenue.
...The hits will keep coming today as Opendoor, Offerpad, and Compass (remember them?) post quarter three earnings.
Agents, anything that stands out to you about what these companies are doing and how it affects your work? Please email me at mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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