Brace yourself — yet another big tech company is promising to disrupt the real estate industry.
Amazon and Realogy Holdings Corp. are teaming up to offer a new program called TurnKey. TurnKey connects clients with local real estate agents to streamline the homebuying and move-in process. Realogy handles the homebuying logistics through a real estate agent while the online retail giant contributes Amazon store credit to simplify the move after closing.
“Alexa, buy a house!”
Don’t worry, Alexa won’t be buying and selling homes by herself anytime soon. Instead, TurnKey’s mission is to make today’s homebuying and moving processes frictionless.
Here’s how the program works.
First, the homebuyer completes a brief questionnaire at Amazon.com/TurnKey. A Realogy representative schedules a phone interview to match them with a qualified Realogy-affiliated real estate agent.
After closing, the homebuyer receives a $1,000 – $5,000 credit for Amazon products and services (courtesy of Realogy) depending on the home’s purchase price. The minimum purchase price for those Amazon goodies is $150,000.
The credit only includes Amazon smart home products (like the Ring and Echo product lines) and Amazon-vetted moving services, including unpacking, furniture assembly and cleaning services.
Let’s make a deal
Technically, Amazon isn’t directly involved in buying and selling homes — instead, it’s contributing its traffic to become a lead generation system for Realogy agents.
As an e-commerce search engine rivaled only by Google, Amazon is the first place many shoppers visit for, well, almost everything. Amazon and Realogy are betting prospective homebuyers will start their search there, too.
As the largest residential real estate brokerage company in the U.S., Realogy is using its sheer size to seize this opportunity. Realogy owns the prominent real estate broker brands Century 21, Coldwell Banker and Sotheby’s International Realty, among others. TurnKey allows it to leverage its vast network of real estate professionals to locate buyers.
In California, the program has already launched in Los Angeles, San Francisco and Sacramento. But it isn’t the first to roll out a homebuying incentive program in these markets.
Retailers like Costco have offered similar incentive programs for years. When Costco announced their incentive program in 1997, it offered buyers rebates amounting up to 30% of their agent’s fee.
And Costco’s rebates weren’t tied to the store in the same way TurnKey restricts their freebies to Amazon products and services; Costco offered cold hard cash from the start.
We know what Amazon and Realogy stand to gain from TurnKey, but how are agents protected in this partnership?
The industry’s fragmented analog structure has survived plenty of big tech “disruptions” from the likes of Redfin, Zillow and Trulia. Companies that promise to replace agents with technology offer a misguided understanding of the industry’s future.
In contrast, TurnKey claims to respect the irreplaceable expertise of real estate agents. After all, it performs the agent’s thankless task of filtering out lookie-loos to push serious buyers to the top.
But Amazon seems to be taking the lion’s share of spoils in this deal. Sure, Amazon delivers the traffic, leads and freebies, but it also takes a healthy cut of agent fees for the privilege. And those freebies aren’t free; Realogy is the one footing the bill for the smart home devices and moving services.
At the end of the day, Amazon reaps valuable data from customers and Realogy’s stock gets a healthy boost in the wake of TurnKey’s announcement, leaving agents caught in the middle.
Which begs the question: How agent-friendly is TurnKey really?
Agents — are you willing to pay for an Amazon lead? Leave your thoughts about the TurnKey program in the comments below.