Digital mortgage lender Better.com is exiting the real estate business.
The struggling fintech startup laid off its real estate team on June 7, multiple sources confirmed to TechCrunch. The company is said to be shifting from an in-house agent model to a partnership agent model.
One person who was impacted by the move told TechCrunch that the agents had received “little to no severance…after getting a more than 50% salary cut in November in order to ‘ensure’ our jobs to come.”
TechCrunch reached out to Better.com, which declined to comment on the record. It is not clear how many people were impacted.
The news is not shocking considering that rumors of Better.com’s plans to exit the real estate business have swirled for some time as the housing market has experienced a major slowdown driven by rising mortgage interest rates. As early as April of 2022, TechCrunch reported that it was suspected that all of Better Real Estate could be scrapped. The unit was at one time the “baby” of the company, sources said, and where a big chunk of investment dollars were going to go toward in 2022.
Better had been vocal about its desire to build out its purchase experience and move beyond digital lending to help people find and purchase homes — hence changing its name from Better Mortgage to just Better. It was also working to expand value-added offerings like title and homeowner’s insurance as part of its product suite.
“They wanted to touch every part of home ownership,” a source close to the company who preferred to remain anonymous told TechCrunch at the time. “The company invested resources in building out consumer experiences and agent-facing tools for the Better Real Estate business, including its first native mobile app, not all of which came to fruition, given the trajectory of the business.”
Better Real Estate aimed to be competitive with the likes of Zillow and Redfin, and the company had reportedly followed the same salaried-agent model.
Better.com has been making headlines for its layoffs since it first gained notoriety by laying off about 900 employees over Zoom on December 1, 2021. It has since been laying off smaller groups very systematically, say sources. Last August, TechCrunch also reported the fact that Better.com had conducted its fourth round of layoffs since the previous December.
The company is not exactly known for its tactful approach to letting employees go. In less than a nine-month period, it let go of thousands of workers, saw numerous senior executives step down and delayed a SPAC that it still claims to be working toward.
In March, TechCrunch reported Better.com’s SPAC deal with Aurora Acquisition Corp. got a new lease on life, extending its timeframe to close the transaction through the end of Q3 2023.
Want more fintech news in your inbox? Sign up here.
Got a news tip or inside information about a topic we covered? We’d love to hear from you. You can reach me at [email protected]. Or you can drop us a note at [email protected]. Happy to respect anonymity requests.
Source: Tech Crunch