In our business, success is highly dependent on being front and center in the consumer’s eye. So, what happens when the center keeps moving?
The poet W.B Yeats wrote, “Things fall apart; the center cannot hold.”
The introduction of iBuying has undoubtedly tested the center for the traditional brokerage model, but I don’t think things are falling apart by any stretch of the imagination. I prefer to think of this time as an evolution, and in that vein, it’s helpful to take a step back and gather much-needed perspective of where we have been. This will further an understanding of the path forward to a successful future—one that puts you front and center yet again.
We just completed the Better Homes and Gardens® Real Estate Owners’ Retreat, and it was inspiring to hear our incredible guest speaker Mike Delprete from the University of Colorado share his thoughts about the state of the industry.
Ironically, his view that things are potentially coming full circle followed my challenge that every real estate brokerage and its leaders must have the right team in place—both today and every day into the future. Essentially disruption is happening every day, and we must evolve to always be ahead with our staff, offerings to agents and consumers.
Review of Real Estate Disruptors
Mike skillfully guided us through a short history of real estate disruption, which is a tale of control—and more specifically about the power of information.
Before the internet, the real estate agent-controlled listing information and thus was the center of the transaction. With the advent of the web, listing distribution companies shifted focus from the agent to online properties, where information about listings was no longer the sole realm of the agent. Zillow went one step further, took Automated Valuation Models (AVM) that many already had, made it cool, and put itself at the center of the consumer’s focus with the Zestimate.
Mike then shared that Opendoor may have supplanted Zillow at the center by going beyond an estimate and giving an actual offer. That led to Zillow re-inventing itself as an iBuyer to reclaim its status.
Mind Share vs. Market Share
But all along, brokerages and agents have been doing just fine. The various forms of the traditional brokerage still dominate, but the disruptors sure have us taking much time thinking about them. You could say they occupied a lot of “mind share,” but they haven’t caused a dramatic national shift in market share. Even in Phoenix, one of the iBuying epicenters, it has only seized a small percentage of transactions.
Mike told us that while close to 40 percent of real estate consumers get an i-offer, only 5-6 percent actually follow through. Where do the rest of these future buyers go? To a brokerage. Real estate remains a people business, and our clients don’t want to make a bad decision or mistake that could be financially disadvantageous.
Coming full circle, brokerages and the agents are well-positioned to once again reclaim the center, because of the counsel we can offer in the iBuying environment.
The New Center
As we think about the new center, consider a solution that combines the best of both worlds: RealSure, Realogy’s new pilot program that offers sellers with qualifying properties a compelling cash offer immediately upon listing. The cash offer is valid for 45 days, and during this “peace of mind” period, the seller has assurance their home will sell by having a cash offer in hand while the home is marketed by a trusted real estate advisor in pursuit of an even better price, giving the seller unmatched control and flexibility.
Here we see that the key to being front and center in real estate has been and always will be information. What changes in lockstep with the disruptors is the type of information.
Planning for the Future
While this mega-view of our industry involves billions, if not trillions, of dollars, the idea of change is as local as it can get. Every broker needs to understand these shifts in consumer preferences, so you can make decisions about how to evolve your business to stay relevant.
Mind share may ultimately help increase market share, so in looking to the future, how can you best stay competitive in a sea of disruptors? What steps do you need to put in place now to be ready to roll out a new program like RealSure in your market? Do you need to add certain types of people or programs? Are there things you can scale back on that are not as relevant today or tomorrow? Are there synergies you can realize with existing information offerings, like our proprietary PinPoint created with our partner Better Homes & Gardens and its publisher Meredith, that target-market with incredible efficiency and provide even greater relevance in the eye of the consumer?
If we agree that the center will continue to move, then we must also recognize that in order to be successful, we can never stop adapting to ensure that we are always front and center for our clients. Relevance is in the eye of the beholder; let’s be certain they are squarely focused on us!