iBreakup: Keller Williams, Offerpad part ways on home-buying partnership
Keller Williams kept iBuying going after industry players, including Offerpad, stopped in March
Keller Williams and Offerpad have scrapped their exclusive instant home-buying partnership after less than a year.
The Austin-based brokerage said Wednesday that it plans to expand Keller Offers with “other major funding partners,” as it is “no longer in an exclusive agreement with Offerpad.”
Keller Williams didn’t directly comment on why the partnership broke down, but it likely had something to do with different iBuying strategies after the coronavirus struck. Whereas Offerpad and other major iBuyers suspended home-buying in late March, citing the shaky housing market, Keller Williams made it a point to keep going, saying sellers needed the certainty of getting an all-cash offer for their home.
Gayln Ziegler, COO of Keller Offers said in a statement that the brokerage now recognizes “the need to expand the program beyond Offerpad” and will be working with “multiple funding partners” to expand Keller Offers. She said Keller Williams would stay in “limited partnership” with Offerpad in 21 cities where it currently operates. (Keller Williams will also do deals in those markets with new funding partners.)
“Our goal, working with multiple funding partners, is to also provide more than one cash offer on a property,” Ziegler said.
In a statement, Offerpad said it “agreed to part ways with Keller Offers, allowing us to expand our buying power and solutions to additional brokerages and agents.” The five-year-old Phoenix startup has raised nearly $1 billion in debt and equity.
Darryl Frost, a Keller Williams spokesperson, declined to disclose the names of the firm’s new funding partners or the amount of money being committed.
But Wednesday’s announcement represents yet another pivot by the brokerage on iBuying.
The franchise firm entered the space reluctantly in 2019. “I can’t allow Opendoor or Zillow to get out and be the only player in the iBuyer space,” CEO Gary Keller said at the time.
Initially, Keller Williams said it would spend $100 million to grow the offering, then turned around and announced a partnership in which Offerpad did the buying and selling of homes.
Under the agreement, Keller Williams agents steered sellers seeking cash offers to Offerpad, which in turn enlisted Keller agents to market the properties. Keller agents were paid 1 percent commission on the front and back ends of the deal.
The break from Keller Williams is the second high-profile split for 5-year-old Offerpad. Offerpad was one of the first companies to partner with Zillow on iBuying, but severed ties when the listings giant launched Zillow Offers last year. Offerpad rival Opendoor has a partnership with Redfin.
Major players including Zillow, Opendoor, Offerpad and Redfin have resumed iBuying since scaling back or suspending it in March.
“We’ve seen that people — despite these uncertain times — still want to move,” Zillow president Jeremy Wacksman said last month. Like other real estate players, the firms have added precautions to a process that already emphasized virtual transactions.
Over the next six months, Keller Williams plans to launch Keller Offers in new markets, including Denver, Oklahoma City and Nashville.