Keller Williams is joining the iBuyer craze: The Austin-based real estate franchise is launching its own all-cash, online homebuying program next month in Texas, and plans to expand that program to as many as eight metro areas by the end of the year.
Keller Offers will first go live in the Dallas-Forth Worth area sometime in May, according to Keller Williams spokesperson Darryl Frost. That will pit it directly against other, more established iBuyer competitors, including Opendoor, Knock and Zillow Offers, all of which also seek to buy homes directly from sellers over the internet for all-cash.
Keller Offers will also pair users with a Keller Williams agent — potentially setting itself apart from other iBuyers that can theoretically cut agents out of the equation. (Opendoor and Offerpad both allow for buyers and sellers to interact with them without an agent, but both also work with real estate professionals as well. Zillow Offers always re-lists the homes it buys for sale again on the open market with a local real estate agent who is a paying customer of Zillow Premier Agent, the company’s online advertising program.)
Keller Williams plans to spend $100 million through its iBuyer Keller Offers over the course of 2019, and by the end of the year expects to be active in six to eight major U.S. markets. Meanwhile, rival San Francisco-based iBuyer Opendoor is now available in 19 markets nationwide and Zillow is active in nine across the U.S.
The announcement that Keller Offers is on the verge of a launch comes after company co-founder Gary Keller teased the program in January. At the time, Keller said that the company’s iBuying effort was likely to launch in the second quarter of this year, and could debut in Arizona.
Asked Monday about the decision to launch in Texas rather than Arizona, Frost said that Keller Williams has “an ever increasing list of eager agents ready to take the iBuyer offering to consumers in the Dallas area and in other markets we’re announcing soon.” He added that Keller Offers would scale quickly this year.
Gary Keller also said in January that he didn’t want to buy houses, but indicated the company had few other options than to jump into the ring with other iBuyers.
“I feel like I have no choice now,” Keller said during a presentation in January. “I can’t allow Opendoor or Zillow to go out and be the only player in the iBuyer space and then begin to dictate terms and build brand around ‘they buy houses.’”
Those comments hinted at the deeply disruptive impacts iBuyers are having — or at least are poised to have — on the real estate industry. For several years now, iBuying has been dominated by dedicated companies such as Offerpad and Opendoor, the latter of which has raised hundreds of millions of dollars from mega-fund Softbank, among other investors.
More recently, companies such as Redfin and Zillow have also ramped up their own iBuying programs. Zillow in particular has been aggressively diversifying its services that work with its all-cash Offers program, adding a lender for example and promising to include a proprietary 3D Home tour for each property in the future.
Apparently sensing the growing threat such moves represent — and despite Keller’s stated aversion to the sector — Keller Williams has been quietly preparing its own iBuyer program for some time now. Last fall, the company confirmed that a test program was in the works and had already closed nearly 100 transactions.
Keller Williams agents have also previously moved to get into iBuying on their own. Last year, the Arizona-based Kenny Klaus team launched OfferDepot, which essentially aggregates various all-cash offers so consumers can see them in one place.
Somewhat ironically, Keller Offers could now represent a significant threat to the established iBuyers. Speaking about a potential Keller Williams iBuyer at Inman Connect in February, real estate consultant and analyst Mike DelPrete said Opendoor could face a “nightmare scenario” in which 160,000 Keller Williams agents show up “in people’s living rooms and kitchens waving around an iBuyer brochure and saying, ‘We do that, too.'”
DelPrete’s point was that Opendoor is vulnerable to competition from companies that have massive scale and already connect to consumers early in their home-buying or selling journey.
For its part, Keller Williams sees iBuying as something of a niche product going forward. Frost told Inman that the company believes the sector “represents less than 10 percent of the overall market,” though the company does see “this as an important additional option for KW agents to be able to offer their sellers.”
That view of iBuying aligns with recent comments from Redfin, which revealed earlier this year that most of its offers are ultimately rejected.
Frost also indicated Monday that Keller Offers will have a consumer focus.
“Our goal is to minimize the cost to the consumer,” he said.
News of Keller Offers was first reported by Marketwatch.