By Rebecca Heilweil
Updated at 5:26 p.m., July 23, 2019
A new partnership between Amazon and the brokerage firm Realogy has sparked excitement — and concern — that the e-commerce giant is now breaking into the real estate industry.
The new product, co-offered by the two companies, is called TurnKey and makes Realogy agents available on Amazon's search platform. At the same time, homebuyers become eligible for a package from Amazon worth up to $5,000.
For instance, someone purchasing a house for about $200,000 through a Realogy agent found through Amazon would be entitled to a $1,000 package. That would include a credit for Amazon's home services — home service providers like electricians and plumbers — movers, and several Amazon smart home products.
Though Realogy's stock had fallen 80 percent over the past year, share prices surged following the partnership's announcement. Meanwhile, Realogy competitor Zillow saw its shares initially drop Tuesday before recovering later in the day.
"Amazon says it doesn't necessarily want to be in the real estate business, per se," Wall Street Journal reporter Katherine Clarke told Cheddar. "They want to push their smart home products really heavily, so this is a way for them to do that."
"What people fear in the brokerage business especially is that this is a stepping stone to them figuring out a way into the real estate market and that's terrifying for them."
Clarke said this partnership is meant to help Realogy gain exposure that can help the company recover from a disappointing year. She added that declines in luxury market sales and contracting commission splits are harming the brokerage industry more broadly.
"It will be great for their exposure. It will be great for the industry in general," Rogers Healy of Rogers Healy and Associates Real Estate, told Cheddar. "If anything, it's going to get Amazon closer to being that monopoly type company."
'It's kind of like [Realogy is] playing catchup," he said, who argued that other real estate companies have already invested in technology. "No one in our industry is concerned about an overtake."
Clarke said that as the company faced competition from Zillow and Trulia, the new partnership is "a real stepping stone for Realogy in terms of getting people to start their search with a Realogy agent."
But Healy cautioned that it's not clear the Amazon package is of that much value to aspiring homeowners, and $5,000 — its maximum value — may not be worth it for being confined to using a Realogy agent.
"If anybody is going to make an adjustment over what realtor they're going to use it's probably an entry-level price-point," he said. "It's not as bright as shiny as one would think."