All week, Inman is taking a Deep Dive into eXp Realty. We’re talking to key executives, unpacking the company’s strategic moves and reporting on the EXPCON event — taking place this week in Las Vegas. Stay tuned in the coming days for more on the tech-focused brokerage, and for future Inman Deep Dives into other top companies.
About a week after Zillow announced that it would wind down Zillow Offers and end its iBuying business, eXp founder and parent company CEO Glenn Sanford characterized the news as a type of defeat.
“Zillow turned their tail and ran last week,” Sanford said Wednesday morning.
Sanford made the comment from the main stage of EXPCON, his company’s first in-person event since the beginning of the coronavirus pandemic. The gathering is happening this week in Las Vegas.
In the lead up to the event, Sanford spoke to Inman and praised Zillow “for innovating and trying to see what they could do.” He also said during the interview that Zillow will likely “keep all of us on our toes.”
However, his comparatively more pointed comment on Wednesday came as he drew a contrast between Zillow’s approach to iBuying and the one eXp has forged. Specifically, in 2019 eXp announced the debut of Express Offers, which doesn’t buy homes outright but instead lets agents connect to a pool of institutional buyers.
Sanford said Wednesday that such an approach involves “no balance sheet risk” on eXp’s part. And he indicated that it can function as a tool for agents to get more listings of all kinds.
“You can use it as a lead gen tool to get listing leads,” Sanford said.
As a result, eXp will “be there for the long haul, building momentum,” Sanford also noted while on stage Wednesday.
The comments echo ones eXp Realty CEO Jason Gesing made while talking to Inman before EXPCON. During that conversation, Gesing said that when it comes to leads from Express Offers, “ultimately 95 percent of the time it’s going to turn into a traditional listing rather than an iBuyer transaction.”
Such remarks highlight how there are, broadly speaking, two schools of thought when it comes to iBuying. On the one hand, there are the dedicated iBuyers such as Opendoor and Offerpad. Such companies frame iBuying as a standalone business in its own right.
But the other school frames iBuying as a niche service that may be most useful for funneling consumers into a company’s ecosystem — even if cash offers themselves end up being rare. Redfin’s Glenn Kelman has probably the biggest public proponent of such a strategy, saying on multiple occasions that most consumers reject cash offers, and iBuying is likely to remain a small niche. Despite that reality, Kelman has indicated Redfin plans to continue making cash offers because iBuying adds value to Redfin’s brokerage services, and because it can be a good lead generation tool.
Express Offers, eXp’s iBuying offer, is functionally different from the approach Redfin takes, which involves actually buying houses outright. But the comments from both Sanford and Gesing suggest that eXp, philosophically, falls nearer to Redfin’s school of thought on iBuying than to, say, Opendoor’s.
And indeed in the lead up to EXPCON Gesing told Inman he tends to think iBuying is “not going to be a huge part of the market.”
“What this does for us,” Gesing said, “is it allows our agents to go to their sellers and say, ‘We’ve got this option for you over here. If it doesn’t work out we’ll go and we’ll list the property.'”