Realogy is latest iBuyer to suspend cash offers
Realogy cited “volatility of the current market” amid fast-moving coronavirus crisis
Realogy is the latest iBuyer to stop making cash offers for houses amid the market turmoil sparked by the coronavirus pandemic.
In a statement, the brokerage holding company said its RealSure program was designed to provide sellers with “peace of mind” and a “more flexible real estate experience.”
“With the volatility of the current market, we do not believe that RealSure can now provide the value the program was designed to deliver,” the company said. “To maintain the integrity and future of RealSure, we made the difficult decision to suspend all cash offers at this time.” But it said Realogy would monitor the market with the goal of restarting the program as soon as possible.
Realogy has not disclosed how many homes it’s bought and sold through RealSure. Realogy got into the iBuying business in 2018. A year later, it partnered with Home Partners of America, which is backed by BlackRock and KKR, meaning the home purchases weren’t on Realogy’s balance sheet.
During a February earnings call, Realogy CEO Ryan Schneider said the program “is driving thousands of cash offer requests in its 10 markets after only a few months.”
Shares of Realogy Holdings dropped 35 percent on Wednesday amid a stock market selloff. But the stock rebounded Thursday, closing at $3.03 per share, up 32 percent for the day.
On Wednesday, both Redfin and Opendoor suspended home-buying amid uncertainty in the housing market and economy overall. “We remain as committed as ever to giving homeowners the option of an instant offer, but only when we can know what a fair price for an offer would be,” Redfin CEO Glenn Kelman said in a letter to shareholders. “With whole cities shutting down nearly all commerce, no one can say what a fair price is right now.”
So far Zillow and Keller Williams are keeping their iBuying programs in place.
“We control the pace of purchases and other levers, and part of our value proposition is that we are going to be there for people who need to buy or sell a home,” said Viet Shelton, a Zillow spokesman.
Gayln Ziegler, COO of Keller Offers, said the Austin-based brokerage had “no intention” of suspending its program. “Bear in mind,” she said, “the situation is fluid.”