Jay Thompson is a former brokerage owner who spent the past six years working for Zillow Group. He retired in August 2018 but can’t seem to leave the real estate industry behind. His weekly Inman column publishes every Wednesday.
Another day, another venture capital investment in an “iBuyer,” another press release touting an iBuyer entry into a new market, another agent crying foul as they wait for iBuyers and a bevy of others to end the careers, aspirations and future of agents and brokers everywhere.
Then there are those who have their heads down, sweat dripping from their brows as they are bent over that metaphorical spinning stone of life and business.
Not grinding an ax, rather, they grind away at the true roadblocks to their growth. Focusing their attention on their own strengths and weaknesses they toil away, understanding that in today’s environment — one that is experiencing rapid shifts in technology, consumer behavior and societal expectations — there is far more opportunity before them than ever before.
Opportunity? Opportunity for what? Opportunity to sell more real estate, to grow financially as an individual, team member (or leader), broker or franchisor. Opportunity to take a business wherever one wants it to go.
Technology provides opportunity to scale and leverage your own and even others’ assets in unprecedented ways. Despite being less than 30 years old, the World Wide Web is poised to change everything about your business — and your life.
The internet will do that whether you like it or not.
Hate to break it to you, but this internet thing isn’t a fad. It’s not going away. Maybe it’s time to embrace, leverage, and use it to help you win. Doesn’t that make more sense than worrying about it? Blaming what would, could and should have happened is a waste of energy. Nothing is going to turn back the clock. No one is going to unplug the internet and send us back to the way it used to be.
Is this the end?
Venture capitalists are practically throwing funds at real estate-related companies of all shapes, sizes and flavors. Nothing is sacred — brokerage models, commissions, transaction management, bundled services like title and lending.
You name it, someone somewhere is trying to change it, fund it, and ultimately, capitalize on it. Every aspect of the real estate business is under scrutiny. There’s just too much money involved for real estate not to be targeted by those with deep pockets — and big ambitions to stuff those pockets full of cold, hard cash.
What is to stop the lone agent or indie brokerage out there from being steamrolled by the big fellas? How is the little guy ever going to compete with the Zillows, Redfins, realtor.coms, KWs and Realogys of the world?
No VC is going to write the broker with six agents and an office in the corner of a strip mall a $400 million check. And you know that Indie Joe’s Real Estate and Bait Shop can’t compete with Compass and its fancy well-lit signs and multi-million dollar tech development funds.
I mean come on, those signs are round. Clearly, the little ones are screwed — there is simply no hope. You might as well just give up.
Seriously, the demise of your career and future as a real estate professional is here. This tech-enabled, VC funded, firestorm of disruption means the end is nigh. What is going to stop the disruption train that’s careening around the corner, rushing at you full steam ahead?
Nothing. Nothing is going to stop it. Consumers aren’t devolving en masse and suddenly deciding that they would rather not have access to data. They really don’t prefer physically meeting with an agent to flip through a three-ring binder filled with Xeroxed data sheets with one photo that’s been faxed and refaxed multiple times.
Your broker, faced with ever-rising costs and razor-thin margins, isn’t going to rewrite your independent contractor agreement and provide you with 125 percent of your commission all while covering your marketing expenses and footing your tax bill.
Zillow isn’t going away, no matter how many times you shout, “If everyone would just withhold their listings Zillow would die!”
The National Association of Realtors won’t come charging over the hill, swords drawn, wailing away to save the real estate industrial complex. It’s over. You’re done, screwed, toast, kaput, finished. Adios, arrivederci, goodbye.
After all, in listening to some of the prognosticators, you’d think that soon (maybe even next week!) there will only be iBuyers. That soon no one will use the more traditional approach to buying and selling a home, you know, with a real estate agent, one that works for a broker. The same way that 90(ish) pecent of homes are bought and sold today.
Nope, this is an all-or-nothing proposition. There seems to be no in-between. Someday, soon, brokerages across the country will fold. Those new-fangled “virtual brokerages”? Oh, their demise is near too.
Everyone is doomed. After all, what consumer in their right mind doesn’t want to surrender some equity for convenience? Everyone wants the same experience. Everyone has the same wants, needs and desires, especially in regard to purchasing or selling their largest financial asset. There’s one model, one solution for all, right?
Adjust your mindset, and focus on the consumer
Why is iBuying an all-or-nothing deal? Why can’t there be different ways, different paths to purchasing or selling a home? After all, Walmart and Nordstrom manage to co-exist. Heck, there are even travel agents making a great living right alongside a bazillion travel sites. Travel agents! Want to buy stock? You can do it online, or call a stock broker.
Consumers want options. Real estate needs options. IBuyers provide options. Portals provide options. “Discount” brokerages provide options. Options are good. Good for the consumer, and good for the real estate practitioner. Options promote competition and innovation, both of which are good — for everyone.
Buying a home is an expensive, infrequent, emotional, complicated process that’s different for everyone.
You know what apps and websites and computers are not very good at dealing with? Expensive, infrequent, emotional, complicated processes that are different for everyone.
I’ve yet to see an app that can handle a call from distraught buyers who are in the middle of an emotional meltdown because their inspector just told them the water heater in the home they want is on its last leg.
Show me an app that can talk sellers off the ledge after they just found out the third buyer for their home got a denial letter from that lender on the internet that they’ve never met.
Are there certain situations where someone needs to buy or sell a home with minimal hassle and disruption, with a well-defined and known timeline, who is willing to forgo some equity or pay a little more for such a service? Absolutely.
Are there other situations where a homeowner or buyer needs the guidance and expertise of a professional? Where the advice and counsel of such a pro smooths the path and reduces the pain, all while maximizing the seller’s or buyer’s return? Of course there are.
So focus on that.
Apply your time, effort and energy into providing ridiculous levels of customer service for that (quite large) portion of the population that wants and needs to use an agent.
Yes, of course you should be aware and informed of changes to the industry. Yes, of course you should be able to explain how iBuyers work, and what they can — and can’t — provide to sellers and buyers.
Put the consumer first. Make everything about them and their needs. The consumer should be your absolute focus — not you, not your commission, not your broker — the consumer.
It’s all about the consumer. And if some of those consumers want, or even just think they want, an iBuyer experience, then be there for them. Give them the facts (the real facts, not made-up fantasies of the way you wish it was). Help them.
Guess what happens when you unselfishly help others? They tell their family and friends about you. Then you get to help them too, and they say good things about you to their friends and family. That’s called word-of-mouth marketing, and it’s the best marketing available. Do more of that.
Try less, “Woe is me, it’s just not fair what these big companies with practically unlimited funds can do,” and more, “What can I provide my clients that will help them navigate these waters and give them an amazing experience so they shout about me from the rooftops”?
Do that, focus on the consumer and not on what others are doing or saying or lamenting. Make the consumer your North Star and watch their business follow that starlit path to your front door.