The Seattle-based technology firm announced the sale of its consumer-facing home search portal to The Real Brokerage earlier this week. The sale comes just a little more than a year after Flyhomes amped up home search functions by incorporating artificial intelligence through its acquisition of a Sam Altman-backed startup.  

Terms of the deal were not disclosed, but the agreement includes an equity investment by the real estate firm into Flyhomes to support its "evolution into a wholesale mortgage lender." With the acquisition, Real will offer Flyhomes' loan products via its mortgage subsidiary. 

"We're also excited to offer Flyhomes' buy-before-you-sell products through One Real Mortgage, giving our agents and their clients more flexibility and control on their path to homeownership," said Real CEO Tamir Poleg in a press release. 

Launched in 2016 as a real estate brokerage and affiliated mortgage company, Flyhomes touted the search portal's multiple listing service integrations and real-time market insights. The company was among the pioneers to establish a business strategy aimed at helping consumers find properties and act quickly in hot housing markets. 

The strategy included buy-before-you-sell purchase loans, which turned into its flagship mortgage offering. 

"As we focus on scaling our buy-before-you-sell financial products nationwide through the wholesale mortgage channel, we made the strategic decision to transition the portal and the team to the best environment for continued growth," said Flyhomes co-founder and CEO Tushar Garg.

The company also offers a program that helps buyers make all-cash offers, allowing for almost immediate purchases upon approval. Buyers used its all-cash option in more than 1,800 deals, which helped lead to over $6 billion in transactions, Flyhomes said on its website.    

In a message to customers posted on its website, Flyhomes announced the portal would cease operating on July 2. 

How the housing market affected company fortunes

As Flyhomes shifts focus entirely to mortgage lending, it encounters a housing market that remains stubbornly sluggish, but also offers pockets of opportunity for its type of products. 

While the company's debut was well timed to capitalize on the housing boom characterized by high demand and multiple bids on properties earlier this decade, volatile mortgage rates in 2022 and 2023 sent both buyer interest and loan origination volumes plunging. Thirty-year fixed rates have remained between 6% and 8% since the second half of 2022, more than double their level in late 2021.

Moderating home prices today are skewing the market in buyers' favor in many parts of the country as well, with higher inventory volumes giving them more time to act. 

At the same time, though, other markets still remain competitive and see prices continue to accelerate. 

Current trends appear to support the growth of the buy-before-you-sell mortgage segment, as sellers remain reluctant to sell a home with contingencies allowing a buyer to back out of a sale, according to Jason Lindwall, president of Move Concierge. 

"We're coming off a market where you couldn't have any contingencies," said Lindwall, whose company helps buyers transition into new residences when relocating. "I think that's still in play right now. No one wants to take a contingent sale."

The 2025 business environment is also leading to mortgage consolidation that illustrates the extent to which lenders are trying to create a one-stop homebuying model that captures the borrower at the point they express interest. While the recently closed merger between Rocket Cos. and Redfin dominated headlines, mergers involving other companies were aimed at building out buyer-to-borrower pipelines that could present challenges for independent real estate brokers and lenders.

Joining the list of lenders with buy-before-you-sell products this year was Rocket, which unveiled its bridge financing option in June to provide flexibility for customers with associated mortgage loans.

How the buy-before-you-sell space has developed

Flyhomes managed to raise $310 million in venture capital funding between 2017 and 2021, the year of its last funding round, according to Crunchbase. Listed among its investors are Andreesen Horowitz and Battery Ventures. 

While some of Flyhomes' peers in the startup scene with similar products eventually folded or merged into other companies, the lender also saw heightened competition arrive as both long-established mortgage businesses and fintechs came out with cash or buy-before-you-sell offerings to tap into the growing segment.

Although downsizing may be viewed by some as a step back, the terms of Flyhomes' portal sale offers the company solid benefits as it looks to grow as a mortgage lender, Lindwall said.   

"It's great because they're going to get access to the buyers that are on the Real network," he said.