Real estate startup buys mortgage technology assets of Reali

Prevu, a technology-focused real-estate brokerage, has acquired the mortgage assets of recently defunct Reali, as it signals its intent to add lending services on its platform. 

The transaction, which closed on Oct. 14, transfers the technology and intellectual property rights previously belonging to Reali Loans, the mortgage arm of Reali. The company offered buy-before-you-sell and all-cash payment services to homeowners, but abruptly announced its closure in August, citing depressed market conditions, as well as the challenging capital-raising environment. Reali is also seeking to sell its title and escrow and power-buying assets.

"Real estate brokerage and mortgage are colliding, as there is a developing super cycle of vertically integrated offerings for consumers," said Prevu Co-Founder and Co-CEO Chase Marsh in a press release. 

"Our acquisition of mortgage technology is a clear next step toward Prevu's upcoming entrance into the mortgage vertical and long-term vision of empowering home buyers by offering them all of the services they need in one place," he said.

Reali's shutdown presented an opportunity for New York-based Prevu to join a growing number of brokerages expanding their offerings into home lending, either through acquisitions or joint ventures, as loan volumes fall off steeply in 2022. Among recent business marriages between brokers and lenders was an August deal by The Real Brokerage, whose acquisition of fellow broker LemonBrew Lending allows it to offer home-finance services in several states. Realtor-franchise enterprise Remax and CMG Financial also teamed up to introduce HomeGuide Mortgage, a joint home-lending business. These tie-ups followed the launch last year of OriginPoint, the partnership between technology brokerage Compass and Guaranteed Rate.

Among the larger real estate companies, Redfin bought Bay Equity earlier this year to expand its mortgage business. Prior to that, Zillow bought Mortgage Lenders of America in 2018. Keller Williams executives acquired Keller Mortgage and Remax offers a mortgage broker franchise, Motto Mortgage.

Going its own way with the introduction of its own mortgage-lending division was San Francisco-based fintech Radius, which started offering mortgage loans over the summer.

At the same time, some lenders, such as Vellum Mortgage and JVM Lending, have embarked on their own partnerships as they attempt to expand opportunities in a slowing market, while others are acquiring smaller mortgage companies outright to grow their geographic footprint. 

Founded in 2017 by Marsh and Thomas Kutzman, Prevu currently has business operations in the Northeast, Texas and on the West Coast and has been involved in over $1 billion of real estate transactions since its platform launched. The fintech raised $2.2 million in a 2019 seed funding round led by Corigin Ventures.