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Better HoldCo Inc. is laying off the agents who work at its real estate brokerage subsidiary, Better Real Estate LLC, and moving to a model that relies on partnering with outside real estate agents, sources tell Inman.
While best known as a mortgage lender, Better had touted Better Real Estate as a crucial component of its plans to build out an integrated technology platform providing end-to-end real estate services.
Better’s in-house real estate agents are company employees. In areas where it doesn’t have in-house real estate agents, it refers potential homebuyers who have been pre-approved by Better Mortgage to a network of about 6,500 external partner real estate agents, receiving a fee as a cooperating real estate broker.
A Better Real Estate agent told Inman the company “shutdown with no warning” Wednesday.
A former Better Real Estate broker said he’d heard from colleagues that the company fired all of its agents across the country without notice.
“Agents that I was working with are reaching out to me to move their license to my brokerage,” the broker said.
Better had not responded to a request for comment by publication time.
Better Real Estate was licensed in 37 states and Washington, D.C. and employed 80 in-house real estate agents as of Dec. 31, the company said in a May 11 investor prospectus (the company’s website lists real estate brokerage licenses in 20 states). That was an 83 percent drop from a year ago, when Better Real Estate’s in-house agent count totaled 470.
The Better Real Estate agent said that the layoffs came as a surprise, as the word within the company was that Better Real Estate “was financially stable, although the market was down this past month. My boss heard from [head of Better Real Estate Nick Taylor] at 11 a.m., and he said he had no clue before and he was very close to Nick.”
Late Wednesday evening, an email went out to Better Real Estate Agents offering to let them continue working as partner agents, with Better collecting referral fees equal to 20 percent of their commissions, the agent said.
“I will take their leads and anyone else’s, but I am wary of anything Better related,” the agent said.
The agent characterized the severance package they were offered as an “insult,” but said Better is providing three months of health care.
According to its most recent investor prospectus, Better Real Estate generated $23.1 million in 2022 revenue for Better, which posted an $889 million net loss for the year.
Better’s former head of real estate, Christian Wallace, departed Better in March of 2022 and is now executive vice president of Rocket Homes. Chad Walker, who says he agreed to serve as Wallace’s interim replacement until June 2022, was succeeded by Nick Taylor, formerly of Modus and Zillow.
In 2021, Wallace told Inman that Better Real Estate had about 150 active agents in the field in 12 states and was hiring regional managers, real estate agents, and transaction coordinators with a goal of employing 500 agents in 20 states by the end of the year.
But before the year was out, Better had begun laying off hundreds of workers in its mortgage division, as rising interest rates crushed the company’s profitable refinancing business. During the pandemic-fueled refinancing boom, Better’s payroll peaked at 11,500 workers, of whom close to 90 percent are gone.
In January, with a deadline for taking his company public looming, Better co-founder and CEO Vishal Garg took to the stage at Inman Connect New York to announce a new product, the “One Day Mortgage.”
“At the peak in 2021, 90 percent of our business was refinance,” Garg said at the time. “This year, 90 percent of our businesses is purchase.”
In its most recent investor prospectus, Better said it employed a total of 1,300 team members company wide at the end of the year, including 500 in mortgage production, and 250 workers in other business lines, primarily real estate and insurance.
“We have scaled down our in-house agents to better align costs with decreased mortgage volumes, since our mortgage business serves as the primary lead source for Better Real Estate,” the company informed investors.
Editor’s note: This story has been updated to include information from Better’s May 11 investor prospectus, including the number of states Better Real Estate is licensed to do business in, and in-house and partner agent headcounts. The story was also updated to add Chad Walker’s perspective that he agreed to be the interim head of Better Real Estate between Christian Wallace and Nick Taylor. Walker says he voluntarily gave notice of his departure in April of 2022 before Taylor was hired, and agreed to stay until June 2022 to onboard him.
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