In part one of our podcast series on how to compete with iBuyers, we established that Zillow’s Instant Offers, OfferPad, Opendoor and other companies that have an instant offer program model have proven to work and are here to stay. And it’s a waste of our precious time to fight them in this free market society.
What other mindsets must we alter if our industry is going to outplay this latest change?
First of all, we have to get rid of the idea that price is always the no. 1 concern of every seller. We’ve been conditioned to believe that our role is to get them the most money, hands down, every time.
And it’s one we’ve boasted about in likely every listing presentation we’ve been on. The reality is that for 20 percent to 30 percent of sellers, issues of convenience and hassle top the list over price.
As Instant Offers, OfferPad and others creep into your marketplace, they will only be used by sellers who want the “easy” button, but their marketing and overall message is going to perk up the ears of every seller.
Therein lies the danger for this notoriously slow-moving industry if we don’t start getting creative now!
Just because only a handful of sellers will do this, doesn’t mean we shouldn’t know all about it and offer competing programs ourselves.
Make the connection between the sellers curiosity and the opportunity to generate leads, and you’ll see that its not much different than offering the seller a free CMA — just more advanced.
Understand that ventures like this are no longer reserved for the “dumpy” houses. They are going after your regular old vanilla residential homes with no title blemishes or foundation issues, in price ranges, styles and communities that are like the very ones you’re listing right now.
And what are they offering these white-picket-fence sellers? An instant offer on their home that nets them 10 percent to 12 percent below retail.
You may be thinking you can do better than that, but think about it.
After commissions, the inspection concessions/repairs and the other costs of selling in the traditional model, sellers can take their discount and wipe their hands clean of the property before you can say “Where do you want the yard sign?” — especially if time and hassle are their top concerns. And they will have made the same as they would have with you.
There’s more opportunity here for you, though, than just competing against these guys and holding your own!
That opportunity lies in building your listing inventory. Do you know what the venture-backed investors that are buying up these homes are going to do? They’re going to relist those houses with their own brokerages! And if the houses don’t sell, the investor will rent them.
After all, when you crunch the numbers in much of middle America, they will yield an 8 percent return on investment (ROI).
What’s the other way that agents can get pushed out if they don’t offer a competing IO (instant offer) program? New construction. All those seller/listing leads you were getting from your friendly neighborhood builder will go to companies like OfferPad that have teamed up with New Home Pros so that it can accept offers from buyers who have a guaranteed home sale.
On today’s podcast, we’ll get into the number crunching of how this works and explain just how hard it can be to compete if Instant Offers, OfferPad and more continue to keep it clean and without excess fees.
The bottom line is that if you’re not on the cutting edge of what is taking place, you’ll soon find yourself competing against a well-oiled machine. You can get a leg up on it right now — if you’re willing to get out of denial and see the immense opportunity ahead.
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Tim and Julie Harris have over 20 years’ experience in real estate. Learn more about their real estate coaching and training programs and schedule a free 1-on-1 coaching call at freecoachingcallsforagents.com.