About 3 weeks ago I wrote about how traditional real estate brokerages, personified by the likes of Realogy, were essentially doomed. Then on Tuesday Realogy announced a “major” partnership with Amazon called TurnKey and their stock surged as much as 30% on the news. Something about people shopping for homes on Amazon and getting a Realogy agent and up to $5000 in Amazon Home Services.
So, after scratching my head a bit, I check out this TurnKey thing and all Amazon is doing is redirecting people to a Realogy Web site where they can find a Realogy realtor. And then it becomes really obvious to me that all this program really is is Realogy offering a real estate commission rebate that can only be used on Amazon. Kind of a dud.
As I was getting ready to write this blog post this morning I stumbled on this TheRealDeal article that basically confirms what I was already suspecting: Amazon can’t save Realogy, analysts say. The article basically lays out how the commission rebate works. Realogy is eating the entire cost and is going to lose a lot of money on this deal. So it’s no surprise then that after all this hullabaloo Realogy stock only closed up 8.5% last night from Monday night before the announcement.
The Realogy business model is just not set up to eat the cost of a rebate and why would a home buyer want a rebate that they can only use on Amazon? Why wouldn’t they just work with a realtor that gives them cash they can use anywhere? I’m just shaking my head over here because we’ve given real estate commission rebates as high as $82,000 without any other strings attached. Apparently Realogy subscribes to the PT Barnum school of marketing – or they are just desperate.
#RealEstateIndustry #RealEstate #CommissionRebates
Gary Lucido is the President of Lucid Realty, the Chicago area’s full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider’s view of the seamy underbelly of the real estate industry you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.