Jay Thompson is a former brokerage owner who spent 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.
Y’all need to relax and take a deep breath.
No, this isn’t about the situation we’ve all been facing these last couple of months. Folks are understandably uptight about that, and saying, “Just relax, everything will be fine. We’ll get back to normal soon,” is getting a little tired. Three cheers for positivity and hope, but this is serious stuff that shouldn’t be dismissed with a breezy, “Hang in there!”
Maybe at some point we will return to pre-COVID life. Maybe not. There’s more than a reasonable chance that the many ways we go about life will be forever changed. The truly frightening thought, which is also a simple fact, is — we don’t know. No one has a clue what life will be like in the not-so-distant future.
Welcome to the new normal.
See, it’s kind of difficult to not get sucked into thoughts and discussions about all things coronavirus. It is, after all, dominating pretty much every aspect of our lives. So let’s diverge a moment and talk about a behavior that’s been predominant for at least as long as I’ve been involved in real estate — which is about 15 years, or even longer.
I’m talking about overreacting to change. I don’t know what it is about the real estate industry, but it seems we tend to flip from oblivious to panic mode at the drop of a headline. Things that make us uncomfortable, that we don’t understand and that confuse us lead to overreaction, jumping to conclusions, non-critical thinking and other unhealthy behaviors and actions.
A prime example
Amazon. (See what I did there? A “prime” example — Amazon. Who knew you’d come to Inman and get opinion and humor?) Anyway, back in July 2019, Amazon and Realogy lit up the real estate news and social wires when they announced their TurnKey partnership.
Boy howdy, in listening to some people react to this, you’d think it spelled doomsday for agents. Sure, reactions were mixed from cheers to jeers to tears. Many people, myself included, thought it was a big giant nothingburger. But there was a lot angst over this, with many genuinely concerned the Amazon machine was about to roll into and over real estate. This was, after all, proclaimed to be a “game changer.”
“What does it mean?” “How will I be impacted?” “What if I’m not part of Realogy?” “What if I am part of Realogy?” “Oh, my God. It’s Amazon! Whatever will we do?”
Fast-forward less than 10 months to last week’s headline, “Realogy, Amazon pause partnership.” Yep, Realogy CEO Ryan Schneider announced on a recent earnings call that the company is suspending its partnership with Amazon. Gone, finito, over.
All that fear and hand-wringing was for nothing.
But wait, there’s more!
Anyone remember the “Stop Zillow movement”? A couple of years ago, a petition was started to get the National Association of Realtors (NAR) to do something about Zillow. This was apparently spurred by a long-lingering distaste for the Zestimate and Zillow Group’s entry into iBuying.
This morphed into a crowdsourced fundraiser to raise $1 million to build the elusive Zillow-killer app. Hundreds of agents donated to the tune of over $300,000. Despite a generous founder’s match of $100,000, media frenzy, and much maligning of the dreaded Zillow, the fundraising goal fell well short. The movement raged on however, and the killer app was born.
Two years later, the app is no longer available through iTunes. It has 500-plus downloads on Google Play, with one two-star review lamenting the lack of customer service.
Contrast that with the Zillow app, which it was designed to replace, with its close-to 500,000 reviews averaging four and a half stars, and more than 10 million installs on Google Play. All that worry and overreaction to Zillow led agents to donate hundreds of thousands of dollars — for vaporware.
Those pesky brokerages
Recently, an overreaction of a different sort hit Redfin, that techie, commission-refunding “upstart” (saw that reference the other day, as Redfin was founded 16 years ago) brokerage so many love to hate.
Sadly, Redfin recently announced it was furloughing 41 percent of its agents. It took only minutes for some to rejoice at the news, proudly proclaiming the death of the Redfin business model, which somehow magically confirms their own. Clearly, the end is nigh for “discount” brokerages, and this is just the beginning!
Not so fast there, Sparky. A month to the day of the dooming and damning furlough, Redfin started to recall employee agents. All that time and energy spent overreacting to news and cheering the demise of Redfin would appear for naught.
Exit the iBuyers
Much like the premature dismissal of Redfin, prognosticators had the same miserable fate sealed for the iBuyers who have announced they are pausing their purchasing activity. You know the ones — Zillow, OpenDoor, Offerpad, Redfin and Realogy.
See, some good is coming out of this pandemic! First the discount brokers are out, and now we have proof the iBuyer model is a farce!
And yep, you guessed it. Guess who’s coming back? After just 60 days or so of all that overreaction to iBuyers shutting down, Opendoor and Offerpad are buying again, and Zillow and Redfin aren’t far behind.
The iBuyers aren’t going away, no matter how much you wish they would. Think about it. Think like a consumer. I’m in the process of buying a home, and trust me, it’s painful. Though I’m not planning on selling soon, I can assure you that if I were, one of the first things I would do is submit my home to every iBuyer serving my area.
Why wouldn’t I? At a fundamental level, if I’m selling my home, what do I want? Buyers. I want qualified buyers that can complete a sale. Guess what iBuyers do? They make offers on my home and are financially qualified to complete a sale. I’m a seller, I want offers, and iBuyers have them. This isn’t hard.
Throw in what we do — and don’t — know about the novel coronavirus and this pandemic. Do you think the idea of selling my home without having a human being, infected or not, traipse through it isn’t appealing?
Herein lies the big problem with all this overreaction to every single thing that shifts and morphs in this business. You’re losing your understanding of what drives and motivates the consumer. Obsessing over what Zillow, Redfin, Compass, Amazon, Google and the others are doing is quite often a waste of time, energy and resources. Relax, and take a deep breath.
Yes, real estate is changing. The world is changing. That doesn’t mean it’s ending. No one is out to get you, really. Oh sure, someone always has the next great idea to slice some money from the real estate pie. To “disrupt” things.
Few set off with designs to actually eliminate agents, because let’s be frank — they want your money. None of that is ever going away. There will always be vendors, disruptors, the IRS and everyone else after your money.
Learn to deal with it. For Pete’s sake and your health’s sake, channel some of that energy you spend overreacting to change and focus on understanding what today’s, and tomorrow’s, consumer demands.
Finally, I’d be remiss if I left off two prime examples of the industry overreacting to news, events and change. They were both the subject of intense discussion and debate — from the press and social media to the stage at industry events. Volumes were written and thousands of hours spent in thought. And all for what?
Jay Thompson is a real estate veteran and retiree in Seattle, as well as the one spinning the wheels at Now Pondering. Follow him on Facebook, Instagram and Twitter. He holds an active Arizona broker’s license with eXp Realty. “Retired but not dead,” Jay speaks around the world on many things real estate.
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