The two companies join forces and launch TurnKey, a program that will match consumers with agents and give homebuyers Smart Home services. Will buyers bite?
Sometimes it seems as if Amazon is in the business of making waves, and that’s just what it’s done by partnering with Realogy, the leading provider of residential real estate services in the United States.
As part of the partnership, the companies are launching TurnKey, a program that promises to be a beginning-to-end homebuying program that aims to elevate consumer expectations when it comes to purchasing a home and personalizing it.
"When we designed TurnKey, we recognized that 'closing' on a home is really just the beginning of the homebuying journey," said Eric Chesin, senior vice president and head of strategy for Realogy. "We are proud to team up with Amazon to extend the value we bring to buying a home beyond the moment you first unlock your new front door."
TurnKey matches consumers in 15 U.S. cities—Seattle, Sacramento, San Francisco, Los Angeles, Phoenix, Denver, Minneapolis, Chicago, Dallas, Houston, Tampa, Orlando, Atlanta, Charlotte, and Washington, D.C.—with participating agents from Realogy’s family of real estate brands, including Century 21, Coldwell Banker, Sotheby’s International Realty, ERA, and Better Homes and Gardens Real Estate. The agents and homebuyers will be matched according to the homebuyer’s profile and their city or neighborhood of choice, and the agents selected have been vetted based on their referrals, high customer service ratings, and short closing times.
The second part of the TurnKey program is the Amazon Move-in Benefit, which provides complimentary Amazon Home Services and fully-installed Smart Home products courtesy of Realogy to TurnKey participants after closing on their home. Services include unpacking, cleaning, handy work around the house, and a “curated suite of smart home products.” The value of the services depends on the value of the home: if the home purchase price is between $150,000 and $399,000, the package value is worth $1,000; if the home purchase price is between $400,000 and $699,000, the package value is worth $2,500; and if the home purchase price is more than $700,000, the package value is worth $5,000.
The idea behind the partnership is not only to help simplify the process of finding a home, but of settling into the home once it’s been purchased.
“Customers can be overwhelmed when moving, and we're excited to be working with Realogy to offer homebuyers a simplified way to settle into a new home," said Pat Bigatel, director Amazon Home Services. “The Amazon Move-In Benefit will enable homebuyers to adapt the offering to their needs – from help assembling furniture, to assisting with smart home device set up, to a deep clean, and more.”
Rumors and speculation of Amazon entering the mortgage space have been growing for quite a while now, to the point where it’s really no longer a question of “if,” but one of “when” and, more importantly, “how”. The easier entry point seems to be real estate. The company offers prefabricated kids on their website, but this partnership allows it to move into a more traditional real estate model, with the added benefit of pushing its smart-home products to homeowners who may have never considered using them before.
“Realogy and our brands are always looking for ways to give consumers an awesome homebuying experience with a terrific real estate agent, and today's launch of TurnKey is a big part of that continued strategy,” said Ryan M. Schneider, Realogy's chief executive officer and president, in a statement. “Realogy's great affiliated agents serve their clients during one of the most important moments in their lives, and Amazon's services and products can transform that moment to make it rewarding in a way no one ever has before.”
While some people may think this is cause for companies like Zillow and iBuying companies to be nervous, others don’t think it’s that big of a deal. After all, people aren’t really going to start their home search on Amazon, are they? In an industry note, Wedbush analysts write that the partnership is a way for Realogy to stay relevant in the increasingly competitive real estate space. Although no one is sure yet how much smart-home products are an incentive to homebuyers, the program should be a great lead generation source for Realogy, and it opens the door for further Amazon partnerships.
What’s more, analysts add, the partnership ultimately poses a greater risk to Zillow than to Redfin. Because of Realogy’s vast network of agents across the country, they may encounter a lot of competition for online led generation dollars. Redfin, on the other hand, isn’t reliant on lead generation dollars, but the brokerage does compete for an online audience. Its largest benefit, according to analysts, are its innovative offerings and its low fee, which are more attractive to consumers.
“While Redfin's discount and TurnKey's promotion are on different transaction sides, we see Redfin's discounts as compelling enough to keep sellers/ buyers in its ecosystem. However, if Amazon does move further into services like iBuying, creating a portal, or offering mortgages, this could be a larger risk to Redfin,” analysts wrote.
Realogy shares have fallen 65% in 2019. In premarket trade the morning of the Amazon partnership announcement, Realogy shares went up by 31%.
