Amazon is known for starting from a garage selling books, with Jeff Bezos and his team boxing up orders themselves. Amazon has since grown to be one of the largest companies in the world, and the king of online shopping. Ben Lane, a managing Editor of at HousingWire sums up Amazon’s impact by saying:
“Amazon reshaped the entire retail landscape, changing how people shop, what they expect of their retailers and what they expect of other companies they deal with. It came from nowhere and now it’s resting comfortably at the top of the mountain while everyone else scrambles for whatever is left over.
Amazon didn’t invent online shopping, retail, video streaming, music streaming or any of the other business segments that the company is into now. What it did do is take what others had done, improve upon it by a dizzying degree, and market it brilliantly.”
If Amazon was able to change the world of shopping to this degree, it must be possible for others to accomplish this in other industries, in particular, housing. There are currently several companies that are each racing to become the premiere one-stop shop for buying, selling, and renting.
Amazon has created expectations within customers that buying should be easy. If you want something, the entire search and purchase process should be simple and easy. Rarely is searching for housing simple and easy, yet it is what customers are becoming accustomed to. If a company could take advantage of this expectation in other industries, they could become the next Amazon.
What Companies Could Be the Amazon of Housing
Three of the companies Lane lists as currently competing for this role are Zillow, Opendoor, and LoanDepot.
Zillow began by denying its identity as a real estate company. The CEO of the company said in 2015,
“We sell ads, not houses…We’re all about providing consumers with access to information and then connecting them with local professionals. And we do a great job of giving those local professional high-quality lead, they’ll convert those leads to at a high rate and then want more media impressions from us. So we’re not actually in the transaction, we’re in the media business.”
Zillow has since embraced real estate, with the goal of becoming that one-stop shop. It created the Zillow Offers program, in order to buy homes directly from homeowners, flip them, and then list them for sale on its own platform. Zillow also purchased the Mortgage Lenders of America in order to enter the mortgage industry.
Opendoor had a similar expansion mission, but went in the opposite direction. It started out buying homes in select cities, and then grew to providing mortgages, and then to connecting homebuyers with homesellers. To accomplish this, Opendoor purchased Open Listings, a real estate site that provides a less expensive alternative to real estate agents. The company also acquired a title and escrow company called OS National. The co-founder and CEO of the company, Eric Wu, commented on the acquisition saying:
“Moving into a new home should be one of the most delightful and memorable moments in life, yet the closing process gets in the way…Our goal with this acquisition is to make title and escrow feel less like a barrier in the home purchase process and more of a welcome mat at the front door of your dream home.”
Opendoor has made it so that it can introduce people to homes, give them tours, let them buy, let them finance, and get them to closing.
Lastly, LoanDepot also has plans to become a one-stop shop. The company connects borrowers with real estate agents and home improvement providers, but is attempting to support buying, financing, and improving homes, as well. In order to accomplish this, LoanDepot brought in the former CEO of Keller Williams, but he ended up leaving the company to work at OJO Labs, a real estate tech startup. The move may have worked in LoanDepot’s favor, though, because they were able to agree to a partnership with OJO Labs to share their AI technology and lending platforms.
Is Amazon the Amazon of Housing?
Ironically enough, Amazon has been looking to get into real estate. So the next Amazon of housing may be Amazon itself. The company has also struck a deal to partner with OJO Labs, but has also recently partnered with Realogy, and Guaranteed Rate. The company has also acquired businesses like SmartRent, another real estate tech startup.
Amazon’s partnerships allow for it to match homebuyers with real estate agents, get mortgages, and even get thousands of dollars in Amazon products to help stage their new homes.
Going Forward
Becoming the next Amazon of housing is not easy, but there are a handful of companies trying to accomplish this in the housing market, including the star in question (Amazon). Regardless of which company wins his race, the housing industry will be reshaped like never before.