Have we reached a tipping point in the trend of massive real estate players beginning to buy homes directly from homeowners?
It looks like that may be the case, as one of the nation’s biggest real estate brands is planning to launch its own direct buying business, and its siblings may not be far behind.
Realogy Holdings, the parent company of Better Homes and Gardens Real Estate, Century 21, Coldwell Banker, Coldwell Banker Commercial, Corcoran Group, ERA, Sotheby’s International Realty, and more, announced Tuesday that Coldwell Banker is planning to roll out a direct buying business in a couple of markets, with potentially sizable expansion on the horizon.
Under the program, homeowners can get a cash offer for their house from cataLIST within as little as one business day.
With the rollout, cataLIST (via Coldwell Banker’s customers) becomes the latest in a growing list of companies buying homes directly from homeowners. Online real estate giants Zillow and Redfin both have big expansion plans for their direct buying businesses.
Each company’s program functions slightly differently, but for the most part, the companies buy the house, allow the seller to set the closing date (within reason), then make the necessary repairs or improvements to the house, and sell it back on the open market.
What sets Coldwell Banker’s program apart is that the real estate agent is still front-and-center in the sales process.
Under Coldwell Banker’s program, a homeowner of a “qualifying property” who lists their home with Coldwell Banker will be able to receive a “cataLIST Cash Offer” on their home, typically within one business day of providing the property information to the real estate agent.
Then, the homeowner has five days to decide whether to accept or reject the cash offer from cataLIST. If they reject the offer, their home will be listed and sold through the “traditional” real estate process using the Coldwell Banker agent.
On the other hand, if the seller accepts the cataLIST offer, the closing can generally occur in as few as 10 days, subject to obtaining clear title to the property.
Here’s what makes the Coldwell Banker program different, according to the companies behind it:
The cataLIST Program allows the homeowner the flexibility to work with a fully trained and licensed market expert. With many other cash offer models, consumers lose the value and expert opinion a top real estate professional brings to the table. The cataLIST Program gives sellers the advantage of working with the same agent regardless of whether they choose the cash offer option or customary marketing provided for in the listing agreement.
“Sellers who choose the cataLIST Cash Offer can benefit from the convenience of a quick sale without having to continue to pay tax, insurance, and mortgage for the property while its being marketed,” said Bill Young, chief executive officer of Home Partners of America.
“Additionally, sellers who accept the cataLIST Cash Offer can close any time within a 90-day window, making it easier to facilitate the move into a new residence,” Young added. “Sellers will have greater negotiating power on their next purchase knowing they have a cash contract on their existing home with a quick closing.”
According to the companies, Coldwell Banker will begin piloting the program in Atlanta and the “Greater Dallas” area in October, and expand into Tampa, Florida, later this year.
But that might not be the end of the expansion. The companies state that “Home Partners of America expects to continue to explore more opportunities with NRT across the U.S. in 2019.”
NRT is the Realogy subsidiary that operates all of its real estate brands, meaning that direct buying programs, theoretically, could be coming from Better Homes and Gardens Real Estate, Century 21, Corcoran Group, ERA, Sotheby’s International Realty, and other Realogy brands in the very near future.
“The cataLIST Program gives agents the distinct advantage of being able to offer their customers either the great listing experience they have long provided or an alternative to the common sale model, one that is convenient and expedites the home sale process,” M. Ryan Gorman, president and CEO of NRT, said. “The cataLIST program keeps our independent agents at the center of the transaction and additionally arms them with a powerful tool to compete with iBuyer players in their marketplace.”
[Update: The headline of this article and its body have been updated to clarify that cataLIST is buying the homes, not Coldwell Banker.]