Amazon is venturing into the real estate business. The retail giant announced an alliance with the nation’s largest brokerage, Realogy. It’s a deal that will help sell homes, and get them equipped with smart home technology. The announcement sent Realogy’s battered stock soaring, and is probably shaking up a few real estate competitors, like Zillow.
The deal involves a new service called Amazon TurnKey, which will reside on the Amazon website. (1) You can find it by going to Amazon/TurnKey. It will make use of Amazon’s vast customer base to lure potential homebuyers in search of a local real estate agent.
Motivated buyers will be directed to local agents within the Realogy empire. Realogy brands include many recognizable names like Century 21, Coldwell Banker, and Better Homes and Gardens Real Estate.
If these buyers close on their deals, they will get a bunch of freebies from Amazon. So Turnkey will help generate leads for Realogy who will pay for the Amazon giveaways. It will also help Amazon get more homes equipped with Amazon products and smart devices.
Amazon Freebies for Home Buyers
The freebie package will range in value from $1,000 to $5,000 depending on the price of the home. For buyers who pay between $150,000 and $399,000, Amazon will give them $1,000 worth of goodies. Those who pay between $400,000 and $699,000, will get $2,500 in free products and services. And, those that pay $700,000 or more will get $5,000 worth of stuff.
The TurnKey website has a list of all the products and services that are available in each category. Among the devices are things like Echo Dots, Echo Shows, Fire TVs, and other Wifi devices like an app-controlled door lock, sound system, and light bulbs. The freebies also include the installation of devices along with other services like the unpacking of boxes, the assembly of furniture, deep cleaning, and/or repairs.
Amazon already provides Home Services for customers who need help installing smart home products. So this expands on that idea and gets Amazon into the real estate business without any direct home sales.
Lead Generation for Realogy
As for Realogy, it’s hoping to pump new life into its own brand. There aren’t a lot of details on the financial terms of the deal but the Wall Street Journal says that Realogy is paying for the freebies from commissions it will earn from the sales. (2)
Realogy CEO, Ryan Schneider, says it’s much more than just a rebate however. He told the New York Times, “Neither us nor Amazon envision this as a way to give cash back to people.” He says the two companies posed the question, “What could we do together that would just make it much easier to move into a house?” The answer, “People want the stress release of getting someone to clean the house or getting someone to put the furniture together.” (3)
Alliance Puts Pressure on Real Estate Competitors
Realogy’s decision to go with Amazon isn’t surprising. The New York Times and marketing analytics firm, Jumpshot, report that more than half of all U.S. product searches take place on the Amazon website. So Amazon already has consumer eyeballs.
More and more buyers are also beginning their home search online. They search through listings without the help of an agent, but most buyers are still using agents to close a deal, so this helps them with that next step.
Realogy is hoping that the TurnKey program will also help identify the determined buyers so that agents don’t waste time with window shoppers. Amazon will benefit by getting more people to adopt smart home technology, and buy products from Amazon. That includes all those Amazon Echo devices with shopping assistant “Alexa.” It’s a win-win for both companies.
TurnKey is being launched in 15 major markets including Atlanta, Chicago, Dallas, Los Angeles, San Francisco, Seattle, and Washington, D.C. As reported by Inman, the metros represented by this launch comprise about 20% of homes sold through Realogy-Property Teamd agents. Inman says, “The partnership essentially catapults Amazon into the lead generation business in similar ways as Zillow, albeit with Realogy as an exclusive partner.”
Realogy’s Eric Chesin told Inman that Realogy has about 3,000 agents participating in this program, and they’ve all had training. He says leads will be given to agents based on their customer service record and knowledge of the local market. They will also be matched to the homebuyer based on the buyer’s profile.
Amazon Home Services director, Pat Bigatel, told Inman, “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.” He says, “The Amazon Move-In Benefit will enable homebuyers to adapt the offering to their needs” as a way to address the post-closing process.
Inman feels that Realogy has the most to gain from the deal. Brad Inman says, it will put pressure on the likes of Compass, Keller Williams, Berkshire Hathaway and RE/MAX. He says that companies need to keep innovating to attract the best buyers and the best agents.
As Inman says of the deal, “The entire industry is buzzing like a $100,000 payout at a Las Vegas slot machine.”
(1) Amazon Turnkey