Amazon is already a one-stop-shop for everything from clothing to home goods to electronics. Its low prices and quick turnaround has made it the most valuable brand in the world. And as of late July, it’s expanding into the real estate market.
Amazon’s has partnered Realogy, a holding corporation that includes behemoths like Century 21, Coldwell Banker, and Sotheby’s International Realty. Together, Realogy and Amazon have announced a service called TurnKey.
What is TurnKey?
The premise is simple. Prospective homebuyers enter their criteria for a home—such as price range, neighborhood, size, amenities, and more—into Amazon TurnKey. From there, TurnKey matches the buyer with a Realogy real estate agent, who works with the homebuyer to find a home that is a good fit. In exchange for using the TurnKey platform, buyers can receive Amazon credits to be used towards purchases for their new home. These will often go towards smart home gadgets like Amazon’s own Alexa and Ring, handyman services, appliances, furniture or other home essentials. The amount of credit buyers receive will depend on how expensive the home is: under $400k will receive $1,000 credit, between $400–700k will receive $2,500, and homes over $700k will receive $5,000 in credit.
Since Realogy is the largest residential broker and Amazon is the biggest retailer, this seems to be a mutually-beneficial arrangement for both Realogy and Amazon. Amazon gets to expand into one of the few industries it doesn’t already have its hand in, and Realogy gets to reap the benefits of Amazon’s unrivaled customer base. It’s understood that the move is a strategic attempt by both companies to compete with the online realty database Zillow, and its Premier Agent Program, which incentivizes realtors to use Zillow’s network to connect with shoppers and close deals.
What are the implications of this partnership?
In general, real estate has been slow to go digital, though not for lack of trying. As Patrick Clark notes in the LA Times, the forerunners of digital real estate like Zillow and Redfin did not substantially “remake [the industry] in their images.” The partnership between Realogy and Amazon marks a trend in the real estate industry towards conglomeration in the digital age, as we’re seeing new partnerships emerge between primarily web corporations and realtors. Earlier this year, real estate brokerage Redfin Corporation partnered with web platform Opendoor on a new program to increase home sales online.
What are analysts saying?
Not all real estate professionals are bullish about this move. Realogy has been served several lawsuits in 2019; the company is accused of various slights, including securities fraud and anti-competitive behavior. Furthermore, Realogy’s stock price was plummeting up until this partnership, and some analysts say this is a desperate move, not a savvy one. Other speculators believe that the success of this platform will depend on how well the service is marketed; at the very least, since this alliance of two corporate behemoths is so unprecedented, it seems like TurnKey will certainly benefit from lots of free press. Another common criticism of the TurnKey program comes from those who view housing as markedly different from almost all other kinds of purchases, and therefore not a great fit for Amazon. If there’s one thing that recent developments have proven, it’s that there doesn’t seem to be a limit to what Amazon can incorporate into its ever-expanding platform.