Some Chicago-area real estate agents have a new tool to calm the nerves of home sellers this week as a business that makes cash offers for quick home sales grows in this market.
RealSure Sale, launched in early October and now entering its 11th metro area in the US, Chicago, is offering sellers a cash offer upon sign-up, valid for 45 days.
“You can have this offer in your back pocket as you go out to find out if the market will pay you a higher price,” said Bill Young, CEO of Chicago-based Home Partners of America, who started RealSure in partnership with Realogy. , the parent company of several residential real estate brands. Coldwell Banker, Century 21 and Sotheby’s are two major Realogy brands in the Chicago area.
Available only to sellers of homes and townhouses, not condominiums, RealSure is real estate brokers’ effort to combat the iBuyer phenomenon, where companies like Zillow Offers and Opendoor make automated offers to sellers, cutting real estate brokers in action. While iBuying has yet to make a splash in the Chicago area, it would. about five percent of home sales in Phoenix, or about 1,000 transactions per month. As technology continues to expand into the home selling industry, Realogy is taking a proactive decision, creating a hybrid of high tech selling and old school brokerage.
“It really allows our agents to better serve their clients,” said Ayoub Rabah, president of Coldwell Banker in the Midwest region, which encompasses the Chicago metro area. “They can come in and excuse the pun here, tell their clients, I’m really sure we can sell your house quickly,” if that’s the client’s priority, he said.
Prior to joining Coldwell, Rabah was senior vice president of marketing at Home Partners of America, the company that now partners with Realogy on RealSure.
Since RealSure was only recently deployed, there is no history to report. Young and Tracey Jeter, vice president of marketing for Home Partners, said no deals have yet been completed in other cities.
Home Partners’ original product, launched in 2012, is a hire-purchase program that was born out of the foreclosure crisis. For this product, credit-damaged people identify the home they want to buy, then HomePartners buys it and leases it to them with an option to buy.
In this model, “we bought 15,000 homes at a glance,” said Tracey Jeter, vice president of marketing at HomePartners. With all of this data, she said, “we are able to estimate the value of a home very efficiently” before making a RealSure offer to a seller.
Chicago may offer a slightly different hurdle for RealSure than the markets in some other cities, due to market weakness here. Homes in the Chicago area have experienced one of the lowest price increases among major cities. And this year, homes are spending an average of 67 days on the market in Will County, 85 days in Chicago and 91 days in Lake County, according to cumulative data released in mid-October by Midwest Real Estate Data and the Chicago Association. real estate agents. Put those two together, and it seems likely that a seller with a RealSure offer in their back pocket might not have enough time in 45 days to determine if they can expect a higher price in the market.
What Jeter calls “effective” prices may sound like low prices to the optimistic seller, although after a long period of adjustment, the number may not seem so bad to a seller.
Gary Lucido, the broker-owner of Lucid Realty and a real estate blogger who has written several times on iBuying, said the weak market here is one of the reasons sellers “should be skeptical” of any form of iBuying, including RealSure. The best preparation, he said, is to “bring in a third party to help you figure out what the market value of your home is.” This can be accomplished through in-depth study of real estate data available online, appraisals and discussions with multiple real estate agents, or any combination of these.
Young acknowledged that the weak Chicago market could be a factor. He and Jeter both said the weakness could also help boost RealSure’s appeal. Homeowners who want to move to their next address without an extended selling time on the old one, and in particular, those who don’t expect to reap big profits from selling the old address, might be drawn to RealSure as a way to speed up their movement.
A quick cash sale “gives you the confidence that you can buy your next home” right away, Young said.