OpinionIndustry News

The Inman Files: Get on the bus, or get hit by the bus

Candle companies were too busy trying to improve candles to create the lightbulb -- don't wait for innovation to pass you by

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The cab companies played wait-and-see too long after Uber launched. That decision ruined their business.

The real estate industry has an opportunity to get into the iBuyer offer business before it passes them by. Beware, the deep-pocket tech companies like OfferPad, Zillow and Opendoor have a head start.

The best way to not get hit by a bus is to get on the bus.

6 ways empowered agents embrace disruption to drive success
Using technology to generate leads and win listings READ MORE

Nothing could be better for the consumer than broker-owners figuring out how to make this an opportunity for their listings and their agents. They offer market intelligence, seller behavior insights and on-the-ground agents who can facilitate quick closings. Plus, their long history with relocation clients and property flips qualifies them more than anyone.

Realogy must be working on such a program, and if not, it should be. No company is more challenged by new market realities that bite at its core value proposition.

The New Jersey franchisor also has an advantage: It knows prospective Wall Street investors better than Beyoncé knows Jay-Z. Over the last 20 years, it has partnered and wrangled with the best of them.

Some creative broker-owners — indie and franchise — are working on their version of a broker-iBuyer program. For example, savvy Arizona broker-owner John Vatistas is working on an idea that would bring in investors to provide home improvement bridge loans to fix up undervalued monster homes that need work and cannot sell. Then, investors could either purchase and flip the homes or put them on the open market. Nothing too radical but a smart response.

Always inventing, Redfin launched Redfin Now, the first broker-launched iBuyer program.

And top producing agent Brian Bair started OfferPad, a property-exchange platform that’s raised $260 million and competes with Opendoor.

Before Thomas Edison came up with his incandescent light bulb in 1879, more than 20 inventors had their versions of a light bulb. Inspired by the competitive brawl, Edison trumped the others because of better materials and because he made power distribution scalable.

Candle companies missed the opportunity, because they were too busy trying to improve the candle.

Light bulb inventors were not trying to improve the candle.

I smell a mega-merger

The last mega-mergers in real estate were in 2014 when Zillow bought Trulia and News Corp acquired realtor.com. Recently, Amazon’s Whole Foods acquisition emboldened the M&A market, and the timing seems right for another major move in real estate.

Here are five deals that might make theoretical sense (just me speculating here).

  • Dan Gilbert, founder of Quicken Loans who allegedly tried to buy Yahoo with $$ from Warren Buffett, acquires Zillow. Why? He is seeking consumer distribution.
  • Zillow acquires LendingTree or Quicken Loans. Why? Z dabbles in home loans, this would give them a BOOM for growing their revenue.
  • Realogy acquires Keller Williams or Re/Max. Why? Buying share is one way to fend off the threats of disruption.
  • Pacific Union (Fidelity Financial) buys BoomTown, Placester and the remaining real estate SaaS (software as a service) models out there. Why? Fidelity has been a master at rollups and spinning off new companies at hefty valuations.
  • Sotheby’s (Realogy) buys Compass. Why? The luxury franchise has no meaningful technology.

A little disruption goes a long way

I get this physiological thrill when I type “B…” into a form, and the form auto-populates my name, proper address, credit card et al. It stacks right up there with a perfect Wi-Fi connection at an airport that does not involve Boingo.

Who do we have to thank for auto-population?

Autocomplete, a variation of the idea, was created in 2004 by Kevin Gibbs as he commuted from San Francisco to Google headquarters. Autocomplete is the intuitive keyboard companion that fills out your string of words when you type in a search term(s) in the URL box. I type “real estate…….” and Google completes my string with “real estate conference.” An algorithm plus my search data creates the magic.

Forms are different.

Patent number US20090006646 was filed by inventor Keith Duarte in 2007 for a “System and Method of Auto Populating Forms on Websites With Data From Central Database.”

And how do small inventions like auto-populate work in real estate? They often do not. I recently did a home loan with a Too-Big-To-Fail Bank, and its bureaucratic requirements trumped anything that might make the experience friendly.

Like cable companies and airlines, their rule-based approach to customers made the experience equivalent to fending off flies on a perfect piece of fried chicken.

Plus, they are masters at old-school forms. Ever try to find a pen in your house?

On Inman

Indies rising

Our latest Inman report, “Indie brokerage strengths and threats,” lays out the case for why indies may be surviving and thriving. But growth and a boutique quality of life depends on achieving a basic business principle — a decent margin and profits.

All of the culture in the world won’t cover up the stress of eking out a living with too much hard work.

Health care, who pays what?

Inman writer Amber Taufen wrestled with the pending health care bill like no one else to figure out how the latest version might affect your health care coverage. She shows it continues to be like sausage making, confusing depending on where you live, how old you are and what your health needs are.

In its current form, the manual will be long and complicated.

Off Inman

Robots are here to help, and to take your money. The latest promo from Alexa (Amazon):


Comment of the week

Tom Grisak commented on Another brokerage using bonuses to attract agents:

“I have no problem with any company offering a bonus or bigger splits to any of my agents. And if my agents want to move because of that, good for them and no hard feelings. They know what I provide. Frankly, I don’t want an agent on my team who’s unhappy. They are a cancer to the rest of the team.”