Offerpad and Keller Williams team up amid iBuying craze
Agents will earn 1% common on the front and back ends of each deal
Amid an iBuying craze, Keller Williams and Offerpad are teaming up to buy and sell more homes.
Through a new partnership, Keller agents will steer sellers seeking all-cash offers to Offerpad, the companies announced Wednesday. Offerpad, which looks to flip homes within a week to 10 days, will then enlist Keller agents to market the properties.
In an increasingly crowded field of iBuyers, the companies said the partnership ensures that consumers don’t have to choose between using a real estate agent or getting an all-cash offer for their home.
“Every consumer deserves a trusted advisor in every transaction,” said Gayln Ziegler, director of operations for Keller Offers. “We do believe that this will change the game.”
The partnership, though, represents a new strategy on home-flipping for Keller, which entered the iBuying space somewhat reluctantly last year.
“I feel like I have no choice now,” CEO Gary Keller said 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.’”
Last year, the Austin-based brokerage — which has 156,700 agents nationwide — confirmed it was testing an iBuying program and had completed about 100 transactions. In April, Keller said it would spend $100 million through Keller Offers this year.
According to Ziegler, Keller no longer plans to use the majority of that money to buy homes, but the brokerage will use it to expand the Keller Offers business. The Offerpad deal will let the brokerage scale its instant-buying program much more quickly. “Our goal is to be in every single market we can get to,” she said.
Keller Offers powered by Offerpad will be live in Phoenix and Dallas by the end of the month and will be in 10 cities — including Atlanta, Houston and Tampa — by November.
According to Ziegler, Keller Williams agents will complete a training program to participate in Keller Offers. Any of those agents can request an offer from Offerpad on behalf of their seller. If they choose to sell through Offerpad, the iBuyer pays the agent 1 percent on the front and back ends of the deal.
“The [agent’s] fiduciary responsibility is to the seller. They still only represent the seller,” Ziegler said. “The beauty of this scenario is the Keller Williams agent gets paid on the front end, back end and their sign will stay in the yard.”
For Offerpad, the deal with Keller Williams is an acknowledgment that some sellers still prefer interacting with a real estate agent. Through Keller Offers, the iBuyer hopes to capture more of those users.
Last month, Offerpad rival Opendoor also announced a partnership with discount brokerage firm Redfin.
“For us, it’s going to allow us to spread our message to even more consumers,” said Cortney Read, a spokesperson for Offerpad. She said Offerpad believes the partnership will yield a “significant increase” in offers, but declined to disclose further details.
Offerpad was one of the first companies to partner with Zillow when the listings giant piloted an iBuying service. But Offerpad severed ties with Zillow when the listings giant launched Zillow Offers last year.
To date, Offerpad has raised $975 million in debt and equity from investors. When it purchases homes, it does so with a debt facility backed by Citibank. In 2018, Offerpad purchased more than 4,600 homes. The company targets homes valued between $100,000 and $600,000 that it can renovate within a week to 10 days. “Our goal is to sell it quickly,” Read said.
Referencing the Opendoor-Redfin deal, Read said Offerpad’s partnership with Keller is different.
“This isn’t a test,” she said. “Both companies agree, this is what consumers want.”