Zillow may as well have declared war on the growing crop of real estate iBuyers when the listings giant announced last month that it would buy and sell homes itself through its Instant Offers program.
But what does all this infighting mean for the rest of the real estate industry?
For some agents, the arrival of the biggest name in real estate tech finally put iBuying on the map. Opendoor pioneered the strategy — in which tech companies and/or institutional investors buy homes from sellers online for prices usually below market value in exchange for the speed and convenience of closing the transaction — in 2014, before a small group of competitors appeared.
And while many agents could shake off any broader implications of new tech solutions for real estate transactions when it was only startups developing the model, with Zillow involved, it’s harder to do.
“For the most part OfferPad and Opendoor haven’t made as much of a penetration into the marketplace — or the consciousness, frankly — for most of the brokers and agents I work with,” said Cameron Paine, a real estate consultant who used to run Connecticut’s multiple listing service. “When Zillow changes anything, it really causes brokers and agents to think about what the ramifications might be. Something like this could touch their business, but they don’t know what it means for them yet.”
The arrival of Zillow in this space pushes real estate professionals to pay closer attention to the other companies that had already started buying and selling homes online. A main difference for Zillow’s model will be how the platform incorporates those who are part of its paid Premier Agent program (which grants agents leads and placement on Zillow searches) into Instant Offers transactions — increasing the value of a pricy premier agent membership.
More than just trash-talking each other, these companies are competing on the ground. They’re operating in overlapping pilot markets: Zillow Instant Offers in Orlando, Las Vegas and soon Phoenix; Opendoor in and around Atlanta, Charlotte, Dallas-Fort Worth, Orlando, Las Vegas, Raleigh-Durham; Phoenix and San Antonio; and OfferPad in Atlanta, Charlotte, Las Vegas, Los Angeles, Orlando, Phoenix, Salt Lake City and Tampa.
The iBuyer wars — as escalated by Zillow — are getting agents to ponder the field as a whole. Paine said that real estate clients he works with as a consultant have varying degrees of knowledge around iBuyers and real estate tech companies.
“I see them as competition among themselves individually, but together I see them as a powerful force against traditional real estate practices,” said N’Marie Crumbie, an associate broker with Berkshire Hathaway Home Services in Scottsdale, Arizona.
Cyndi Lesinski, an agent with JohnHart Real Estate in Southern California, said that she sees this competition among iBuying companies as all competing for a certain kind of seller who prioritizes convenience over their sale price — not competing against the vast majority of sellers who still need a traditional real estate experience.
“Having a couple different businesses competing for that type of buyer, that type of seller — I don’t typically, at this moment, see that creating more of a conflict for the Realtors,” Lesinski said. “The conflict with the Realtor for those type of programs is learning how to evolve, adjust and create your value for those consumers looking for that type of service.”
The strategy for a lot of agents is to let OfferPad, Opendoor and the rest battle it out, while paying special attention to what the biggest name — Zillow — does next.