Troy Palmquist is an indie broker in California with more than a decade of experience. His regular column, which covers a range of helpful tips for agents and op-eds on industry happenings, publishes Thursdays on Inman.
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The threat of iBuyers is very real.
According to a recent article in Forbes, “iBuyers are the latest threat to agents, offering lower listing fees, faster transactions and an online-based process that’s basically made for millennials (an important fact, considering millennials now make up a whopping 36% of all home sales.)”
I have a friend and fellow agent in the Las Vegas market who recently reached out to me to get some ideas on how to not lose listings to an iBuyer.
My friend told me he is actually losing listings because sellers would rather sell their property for slightly less, than go the traditional route.
Companies like Opendoor, Offerpad and Zillow have a strong presence in the Las Vegas market and other parts of the country, forcing professional agents like my colleague, to think outside of the box to earn the listing.
This got me thinking: How can agents stay relevant with the onslaught of iBuyers becoming more prevalent in select markets across the U.S.? Here, I offer a few tips that might help.
1. Build relationships with cash investors
Agents who are experiencing competition with iBuyers should start building relationships with cash investors.
There are a number of investors out there who are ready to act fast, and if you have the relationship, you can essentially show them the property before it ever hits the market. Best case scenario: You can turn an offer around in 24 hours.
2. Understand the iBuyer business model
The old saying, keep your friends close and enemies closer rings true here. Have a clear understanding of the iBuyer business model so you can show sellers the flip side.
An excellent resource for understanding iBuyers is Inman’s “The essential guide to iBuyers.”
Ask yourself, are iBuyers really offering sellers a fair value for their home? For example, Opendoor’s model promises to eliminate all of the hassle and uncertainty of selling a house with a simple, transparent offer.
Sellers don’t need to worry about cosmetic updates, picking the right agent or wondering if and when their home will finally sell. There is no waiting period, and it’s a quick close, but the experience comes at a cost.
Is it worth selling your house for a lower price, rather than paying the commissions that come with a traditional listing package? Do the math, and you might find that it’s not a good deal after all.
It’s important to educate your sellers on what they are truly getting and explain why a traditional route can be more beneficial.
3. Leverage innovative tools
There is a new app that just hit the market that allows people to compare all iBuyer offers side-by-side. It’s zavvie’s Offer Optimizer. What’s its focus? To help consumers make more money by obtaining and comparing multiple offers from iBuyers.
Zavvie’s Offer Optimizer is the first national instant-offer comparison tool powered by advanced technology. Homeowners can click a button to compare instant offers online from leading iBuyers, including Offerpad, Opendoor, Zillow Offers and Redfin Now.
A tool like zavvie is a conversation-starter with the added benefit of eliminating confusion. The best part is the Offer Optimizer provides a detailed breakdown of the various costs and fees, as well as the typical time frame for a sale to be completed — giving your client a clear picture of the iBuyer landscape.
Currently, it’s available to sellers in 21 major metropolitan markets, including Atlanta, Austin, Birmingham, Charlotte, Dallas-Fort Worth, Denver, Houston, Jacksonville, Las Vegas, Los Angeles, Minneapolis-St. Paul, Nashville, Orlando, Phoenix, Portland, Raleigh-Durham, Riverside, Sacramento, San Antonio, Tampa and Tucson.
4. Eliminate pain points, and demonstrate value
If time is a factor, another option is to offer the seller a 30-day trial. Bring an offer with you to the listing appointment, or at the very least, demonstrate your relationships, extensive network and proven ability to generate offers.
It’s your job to convince the seller that working with a professional agent can come with a multitude of benefits. Sellers in these markets are typically shopping all options — iBuyers, listing agents and FSBO.
Don’t assume they are aware of your value. It’s up to you to show your value as an agent, explain your relevance and outline a strategic plan to get the home sold.