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Housing Market Disruptor Banks on Help from Blackstone

Realogy Holdings Corp. and Blackstone-backed Home Partners of America are expanding a joint venture that competes with Zillow and Opendoor.

(Bloomberg)—A traditional real estate brokerage is getting deeper into new approaches to buying and selling homes, and relying on a partnership with a Blackstone Inc. company to do it.

Realogy Holdings Corp. and Home Partners of America, a single-family landlord that Blackstone acquired this year, are expanding a joint venture that competes with Zillow Group Inc., Opendoor Technologies Inc. and other companies seeking to simplify the process of selling a home.

The venture, RealSure, named former Walmart Inc. executive Katie Finnegan as its first chief executive officer, signaling plans to accelerate growth.

“We’re backed by two of the most renowned real estate leaders in the ecosystem,” Finnegan said in an interview. “We should be a material player in the market and a trusted companion to both customers and agents.”

Realogy, the owner of Corcoran Group, Sotheby’s International Realty and others, teamed up with Home Partners to launch RealSure in late 2019 in an effort to keep up with a growing field of iBuyers -- companies that use technology to make it easier for regular people to sell their homes.

The iBuyers practice a new spin on home-flipping that uses price-estimating software to generate rapid offers. When owners accept, they acquire the property, make light repairs, and put the home back on the market.

RealSure does that too, but offers sellers the option of listing the home with a traditional agent for 45 days. The idea is to assure sellers that they’re not leaving money on the table by taking the instant bid. The program is also designed to make sure agents earn a commission, whether RealSure buys the house or the seller chooses the traditional route.

There’s a potential downside, too. If RealSure makes offers to set a low bar for Realogy’s agents to beat, sellers may seek richer deals from other online companies.

Home Partners of America has capital and pricing expertise to help meet that challenge, according to Finnegan. The company, which provides renters a path to becoming buyers, also contributes expertise on renovations. Blackstone agreed in June to buy Home Partners in a deal that valued it at $6 billion.

Finnegan joined Walmart when the retail giant acquired Jet.com and later served as a top e-commerce executive at Rite Aid Corp. She said her retail background has convinced her that the key to improving the home-selling process is to give customers confidence in the transaction.

“Everyone is focused on speed,” she said. “But it’s more about certainty and precision.”

© 2021 Bloomberg L.P.

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