With Zillow and Opendoor building a totally tech-driven transaction at the expense of real estate agents, agents must figure out how they can come out on top. Those agents who find this scary and those that find it exciting will likely predict who survives and thrives, and who become extinct.
Earlier this year, HousingWire captured this notion that agents’ fears of new things are crushing their chances at growing their business: “Most of the complaining and bad-mouthing I see [from agents] is rooted in fear and scarcity thinking. Fear of a new way of doing things. Fear of the unknown. Fear of new competition. Fear of new technology. Fear of new business models,” they wrote. It’s spot-on. Sure, the unfamiliar can be scary, but keep in mind that any complacency only fuels your competitors’ business; that’s what should be scary! It’s time agents adopted new ways of thinking to stay above the tide.
Case in point: in 2019, Rich Barton, CEO of Zillow, shared with The Real Deal that he convinced Zillow’s investors that Opendoor was “an existential threat, because if it works and we don’t do it, we get displaced as the marketplace.” Opendoor was the catalyst for Zillow embracing change, transforming from a search and media company to an iBuyer. Now, they’re on their way to building a one-stop home buying and selling shop. Had Opendoor not come on the scene and forced Spencer Rascoff to step down as CEO, Zillow would have stayed in its lane—making small, incremental improvements to the business—not transforming to what it needs to be for them not only to survive but thrive.
The core driver of these “one-click” Amazon wannabes? Revenue yes, but more so the goal of putting the customer in complete control and cutting out the middleman (aka the agent). You can buy a new car online and have it delivered to your door tomorrow, or sooner, without talking to a single salesperson. It’s fast, easy, and convenient; it’s the transaction consumers want and have come to expect. And now it’s going to become the new norm with buying and selling homes.
You can argue that 89% of buyers work with an agent because they want to have a partner with hands-on experience and local expertise, but that doesn’t mean they will endure the pain of the traditional transaction to get it. No client loves the uncertainty, inconvenience, and cost of buying and selling the old way. The COVID-19 pandemic only proved that digital is the way of the future. Consumers embraced digital closings, video tours, virtual open houses, and the like. That’s the expectation from now on, and there’s no going back.
Companies like Knock, which partners with agents to help their clients buy their new home before selling their existing one, are perfect examples of how agents can embrace technology solutions designed for that gold-plated consumer experience. It’s free for agents to use, and they get a full team of real estate and tech experts behind them that help manage both parts of the transaction from start to finish. Now that’s putting the customer first!
Looking to 2021 and beyond, it’s the most nimble and tech-savvy real estate agent who will not only survive this new tech-centric world but thrive in it. What happens to those who don’t change? They will join Spencer Rascoff as another real estate professional who was great at the game until it changed, making them obsolete in the process. It’s up to agents to decide if they are part of the last generation or the next one by succumbing to technology and change or embracing it.