Unhappy with its market share in the US real estate market, the largest online retailer in the world and global commercial monopolist, Amazon, announced a deal on Tuesday morning with the largest US residential real estate brokerage company, Realogy, in a strategy designed to boost sales for both.
As CNBC reports, Realogy - whose stock soared 25% on the news - and Amazon will now offer TurnKey, a horizontally and vertically integrated program meant to streamline and optimize the home- and furniture-buying process, by taking potential homebuyers through the Amazon portal and connects them to a Realogy agent. Once they purchase a home, they then get complimentary Amazon Home Services and products worth up to $5,000.
Realogy, which is the largest real estate broker in the US and which owns such brands as Coldwell Banker, Century 21, Sotheby's International Realty, Corcoran, ERA and Better Homes and Gardens Real Estate, has been facing stiff online competition from newcomers like Compass and Redfin, which rely heavily on high-tech, online platforms. As CNBC's Diana Olick writes, "partnering with Amazon gives Realogy a platform unlike any other, not to mention access to more buyer data."
"We're the market leaders in this industry and we like that position, but you always have to be innovating to stay ahead, you've got to be willing to cannibalize yourself, you've got to do all the things that a big successful company needs to do to stay on the forefront," said Realogy CEO Ryan Schneider.
"In a world that is awash with low quality lead generation out there, where you can get real estate leads from millions of online websites, giving an agent and franchisees high-quality leads from a source like Amazon and Realogy together is a real differentiator that's going to be very powerful for the group."
The group's simple strategy for success: Always Be Closing... and then get the buyer to purchase a whole lot of additional stuff as well.
Here's how it will work: a potential buyer will go to the TurnKey portal on Amazon and put in information on the type of home they'd like to purchase, the location and price. Amazon then matches them with a Realogy agent. Once the buyer closes on the home, Amazon connects them with services and experts in the area. The buyer not only gets a selection of Amazon Home Services, like painting or hanging a large TV, but they also gain access to smart home products, like a Ring doorbell, to be installed by Amazon professionals. The value of the free products and services can range from $1,000 to $5,000 depending on the purchase price of the home.