Offerpad will provide the homebuying capital behind Keller Offers in 12 markets, giving KW agents a chance to rep both sides of a sales transaction for the iBuyer.
Keller Williams Realty and Offerpad have entered into a game-changing new partnership that will place the Arizona-based iBuyer at the center of the Texas-based brokerage’s rapidly growing iBuyer platform, executives told Inman.
The deal, announced Wednesday, will allow Keller Williams agents to act as listing agents for various Offerpad-owned homes while shifting financial obligations onto Offerpad’s shoulders for the homes Keller Offers buys in 10 markets, effectively handing the iBuyer access to KW’s army of 160,000 agents.
“With Keller Offers, consumers no longer have to pick between all the options available to sell a home without having an advocate to advise them,” Keller Williams President Josh Team said in a statement. “In our pursuit to drive the best end-to-end consumer experience, we’re giving consumers the most choices available. And, we believe an agent-driven consumer experience is best to deliver that choice.”
According to terms of the deal, beginning Aug. 31 Keller Williams agents will have the ability to act as listing agents for Offerpad-owned homes in Phoenix and Dallas. The partnership will expand to Atlanta, Austin, Charlotte, Houston, Las Vegas, Orlando, Raleigh, San Antonio, Tampa and Tuscon by the end of 2019.
Keller Williams agents will be required to become Keller Offers Certified iBuyer agents, a designation that will allow them to submit a cash offer request via the Keller Offers platform. Once the request comes in, Offerpad will generate an offer within 24 hours using its proprietary technology.
The offer is then sent back to the Keller Williams agent to present it to the seller. The agent will consult the seller on all their options, including listing on the market or accepting the offer. The Keller Williams agent will continue to guide the seller through the Offerpad process.
Keller Williams is following in the footsteps of Realogy, which powers its iBuyer platform with Home Partners of America as the capital behind the homebuying aspect. For Keller Williams, the move was less about the need for capital and more about the ability to scale the platform rapidly.
“The capital is there, but what this partnership allows us to do is to scale rapidly,” Gayln Ziegler, director of operations for Keller Offers, said in a statement. “That is something that we want to provide to our agents and we owe to consumers in those markets. They deserve that representation.”
One potential downside to the partnership, however, is the increased fee home sellers could face when utilizing the partnership. Although they won’t explicitly have to pay the commission of a buyer’s agent, they will still be required to pay Keller Williams agent commissions plus a fee to Offerpad, which can range from 7 percent to 10 percent depending on the home.
Ziegler says the listing agent can negotiate their commission own fee and will also receive an undisclosed commission on the re-sale of the home. The Keller Williams agents that refer the buyer to Offerpad will also represent Offerpad in the selling of the home.
“Agents will be paid on the front end and they’ll be paid on the backend because they’ll re-sell the property, and their sign will also stay in the yard.” Ziegler said. “They can work out any agreement they want with the seller because that is their relationship with the seller, it’s not ours or anyone else’s to dictate that.”
The new partnership will no doubt be a boon to Offerpad’s standing in the iBuyer race, where their top competition is Zillow, Opendoor, Redfin and Knock. Offerpad currently says it receives a new offer request from a homeowner every 30 seconds and acquires a home every 20 minutes throughout regular business hours.
“Reaching new markets and customers is imperative to the future growth as a company,” Offerpad CEO Brian Bair told Inman. “This partnership gives us a familiar, proven path to reach them, introducing our consumer-focused selling solutions to entirely new audiences.”
Offerpad has long worked with real estate agents, but in the past, agents and brokerages came directly to Offerpad to request an offer. This is the first exclusive partnership for the company.
At Inman Connect in New York earlier this year, real estate tech advisor and Inman contributor Mike DelPrete laid out this “nightmare” scenario for Opendoor, one of Offerpad’s top rivals in the space. In the presentation, DelPrete said Opendoor‘s “nightmare scenario” is 160,000 Keller Williams agents “in people’s living rooms and kitchens waving around an iBuyer brochure and saying, ‘We do that, too.”
The partnership is also similar to one Opendoor and Redfin announced in July that allows prospective homeseller clients to use Redfin’s website and mobile apps to request an all-cash offer for their property directly from Opendoor, or request a free meeting with a Redfin agent where the agent will present two selling options: 1) the Opendoor all-cash offer or 2) an estimate of how much Redfin could get if the seller wanted to list with the brokerage on the open market.
Zillow uses real estate agents to represent it on both the buying and selling of homes, although the company has no exclusive partner and instead selects a local brokerage in each market.