Is it time for agents to start worrying about OpenDoor, Redfin Now, Zillow Offers, and other “iBuyer” ventures?
We’ve said it once, and we’ll say it again: there’s something truly unique about the real estate industry. On one hand, the industry as a whole seems particularly vulnerable to a technological breakthrough that will fundamentally change how real estate is bought and sold (think of what Uber did to the taxistand). But on the other, recent research has shown us that younger buyers – despite what one would assume – are MORE likely to use a real estate agent when compared to previous generations (source: National Association of Realtors). Add to the fact that companies such as OpenDoor are announcing wave after wave of additional investments and it starts to get a little confusing – should real estate agents and brokerages be worried about these iBuyer ventures? (Side note: OpenDoor recently engaged in another round of fundraising last month and received $200 million – for a total valuation of $2 BILLION – AND THEY ONLY OPERATE IN SIX MARKETS!!!!)
A problem of trustworthiness and reliability.
Most clients won’t sacrifice knowing they received a good deal in exchange for convenience. For most, a person’s home is their biggest financial asset so taking their time to make sure they get the best deal possible makes a lot of sense. And while it’s true that sites like OpenDoor and Instant Offers make things easy for sellers by allowing them to list their home and to set a price via some advanced algorithm (some will actually buy the property from the seller if it doesn’t sell after X amount of days!), the reality is that they almost always come out receiving less. For clients looking to offload a property quickly, this can often your best option. For everyone else, not so much.
Simply put: most clients want to KNOW they’re doing all they can to make sure they’re getting the best value possible. Given that clients value market knowledge, responsiveness, and integrity above all else, it becomes clear why these algorithm-driven enterprises have yet to fully takeover the market. But don’t let this give you a false sense of comfort: advancements in artificial intelligence and big budgets in marketing will slowly chip away at the shortcomings of these iBuyer ventures. It seems inevitable that there will be SOME shift in the industry over the long road.
Things agents can do to help themselves:
1) Always be prospecting. It’s important to develop systems to outsource the little things so that you as an agent can focus on prospecting for new clients. Even when you’re swamped, you want to make sure to constantly be networking and putting yourself out there in order to generate leads.
2) Increase your online presence. Creating your own website and maintaining a visible social media presence will allow you to “brokerage-proof” your real estate business.
3) Stay up to date with local real estate market projects, trends, and data. Know your stuff. Post content that shows off this fact.
4) Stay aware of what’s out there. Take the time to do your research on these various iBuyer ventures so you know how to overcome their allure to prospective clients.