Over at Inman News, Jay Thompson, one of the original RE.net bloggerati, has returned to blogging in triumph with his post “Are iBuyers Going to Ruin Everything for Agents.” Read the whole thing. Jay has been busy with other things, like being the face of Zillow to the real estate industry, the last several years, and it really is good to see him bring his unique voice and perspective back.
I think his first post for Inman (at least, in a while) is classic Jay that debunks a lot of the unreasonable fears and points the way forward for the day to day practitioners in the trenches. But I did want to write this post, first as a hearty Welcome Back Kotter moment to Jay, and second, to warn against misreading Jay into a too-comfortable, nothing-will-change, lullaby of pretty lies.
Let me explain.
Not All-or-Nothing… But It’s Still a Thing
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) percent of homes are bought and sold today.
I can’t help but feel like he might be obliquely referring to me in some way. 🙂 Seeing as how while I haven’t said that, I have said that I think things are going to change, and dramatically, and fairly soon:
Now, I don’t think Jay and I actually disagree in any fundamental way. Not everyone is going to use iBuyers, not every property is appropriate for it, and not everything is doomed.
So yes, iBuyer is not an all or nothing proposition. As Jay writes:
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.
He’s 100% correct, of course. Consumers want options. Different companies in real estate provide options. and options are good.
However, there are options and then there are options. iBuyer might not be an all-or-nothing deal, but it’s not nothing-is-gonna-change deal either, any more than the rise of Zillow was a nothing’s-gonna-change deal.
I don’t believe that’s what Jay was saying, but just to be crystal clear, I wanted to add on to and amplify on Jay’s recommendation for brokers and agents.
Thinking About Competition
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.
I could not agree more. It’s a bit of a drum I’ve been beating for a while now on this blog and elsewhere, that real estate talks a great game about being consumer-centric, but often falls short of actually putting the consumer as the North Star. So I’m all-in with Jay on the focus on consumers.
Here’s the thing, though. I know for a fact that so many of the agents who read Jay’s article (and are reading this now) said and are saying, “Well, I’ve always put the consumer first, and provided ridiculously great service, and unselfishly helped others, so… nothing needs to change!”
Sorry… but no. Something needs to change. The status quo will not do.
Ridiculously great service that is focused first and foremost on the consumer includes the ability to offer them the full range of service options. Jay used the example of buying stock: you can do it online, or call a stockbroker. But when you’re the stockbroker, you have to be able to offer the consumer everything he can do online (and then some). If I can buy options online, you as the stockbroker can’t be like, “Oh, you want to buy options? I can’t help you then.” That’s not ridiculously great service.
What’s even worse is when you start trying to talk me out of buying options and into buying stock, because you can make money selling me stock but not options. That’s actually really shitty service and the opposite of “unselfishly helping” me.
What I said in the video above, and hold to today, is that the real estate agent of the future has to have iBuying as an option for clients. You have to. It’s not an option for you the real estate agent, because that has to be an option for the consumer.
This is where competition is headed, and why I thought Realogy’s entry into iBuyer was such a big deal. Regina Maximus could be an amazing agent, completely focused on the consumer, anticipating their needs, great at communicating, who cares deeply about what’s best for her clients. Colleen Banker could be exactly the same as Regina in terms of consumer focus, friendliness, communication, caring, etc., but she can also give the consumer the option of selling their home to her company via iBuyer services. That competition is no longer close. In fact, if Regina truly cared about her clients, she should refer them to Colleen who can offer them more options.
Options = Service
So think about this exchange:
Frank Michael D’Angelo
Spot on Jay Thompson. Let the masses chase the 10% of iBuyers. We’ll continue working with the people who love us, need us and trust us.
EXACTLY. Focus on the 90%!
Sure, focus on the 90%. But in what universe is NOT offering the 90% who love you, need you and trust you the option (and that’s all it is, an option, not a requirement) to elect convenience at the cost of some money some kind of exemplary customer service?
Jay said that Walmart coexists with Nordstroms. That’s true. But they occupy two very different segments of retail, with very different promises to the consumer. And while I’ve never worked at Nordstroms, I have worked at Bergdorf Goodman. So I can talk a little bit about this idea of options as service.
It wasn’t often, but once in a while, I’d have a customer walk in to Bergdorf Goodman looking for something that we did not carry. Maybe it was a particular designer. Maybe a specialty item that we didn’t carry, or if we did, the customer didn’t like what we had on offer. I was trained to try my best to direct that customer to the best store in town who did carry that designer, or that item. I went “shopping” at competitors like Barney’s New York, Charivari, Saks Fifth Avenue, and others, just to meet salespeople who I thought were good so that I can refer customers to them: “Oh, you’re looking for a Yohji Yamamoto jacket? Well, we don’t have a lot of that here, but my friend Trevor at Barney’s is fantastic, and he may be able to help you, sir. Let me get you his number.”
Bergdorf Goodman trained us to think and behave this way, because the company’s culture was to provide the highest level of service possible. That meant providing options, and if we couldn’t, then pointing the customer to where those options could be found.
Now, if said customer asked my opinion on whether Yohji Yamamoto was the best for his body type… well, that’s a different conversation.
Similarly, I expect that the good real estate agents will either offer iBuyer as a service to consumers, or get to know people who can, and take the same approach. I expect that they will focus on the people who love them, need them, and trust them which means offering those people the full range of options and providing the best advice they can. I expect that most consumers will work with a trusted advisor for all of the reasons Jay laid out, but that many of them will take the pain-free option that is iBuyer through that trusted advisor/agent.
And that’s how you remain the trusted, needed, and beloved advisor.
Consequently, the iBuyer phenomenon does require you to change. It does require you to have capabilities you do not have today, because the consumer needs to have options. If you can’t offer those options, then someone else surely will. That’s competition, which Jay says is good for everyone. I agree. But I would point out that competition means change. It most definitely does not mean burying your head in the sand and staying with the status quo.
10 thoughts on “iBuyers and Competition: In Which I Welcome Jay Thompson Back to the Blogosphere”
It’s hard for me to really understand the distinguish between, an iBuyer to “We buy homes in cash”
What`s new here? I have the impression that all the noise here around the iBuyer is only because Zillow decided to become an iBuyer now. Our law office who deals with real estate laws, has many investors who are buying homes, apartment buildings, for cash way before Zillow was exist. I am wondering what will happen if tomorrow Zillow will decide to become a violinist, would it use the word iViolin? I really think that giving the consumer many options to sell or and buy homes is good but, the iBuyer option is not new. This option was, is and always be there for many years.
Well said counselor. Looking forward to how they evolve and adjust when the market corrects and it WILL correct.
Consumers want options? You mean like selling their home for pennies on the dollar? I don’t see how selling their home below market value helps consumers, sorry!
Nobody is forcing anyone to sell for pennies on the dollar. They’re given a price and they can take it or leave it, depending on their circumstances/situation.
We all know that no one is forcing anyone to sell their home for pennies on the dollar, this is not the issue here. The real issue is, Zillow and Opendoor are giving the impression to consumers they invented a new wheel. Well,,, they did not invent anything new and do not give a new service that was not exist before.They are using the power of the media, to distribute their agenda. The media should stay fair and balanced and give the consumer the real truth regarding this iBuyer business model and not to create an elephant from a small fly.
I’ll just cut and paste my response to the exact comment Jon left on my Inman piece:
First, they aren’t selling to iBuyers for “pennies on the dollar.” And yes, some consumers are willing to forgo some equity for ease of sale, for a known price, and a known closing date. That’s been made crystal clear buy the iBuyers’ successes. Deny it all you’d like, Jon, but there are people selling and buying through iBuyers. I myself was in a situation where I would have sold via an iBuyer in a heartbeat, even if that meant leaving some money on the table.
Random fundamental. Residential real estate brokers can never be consumer-centric as long as they are agent-centric. They have outsoruced their consumer experience to 1.3 million random, independent agents that do whatever they want, whenever they want and, to put it bluntly, that is that. Whatever the brokers think, want, have dreamed of doing or should do to best serve the consumer is forever lost in this outsource. And oh yes, there’s this. Professing to have “great customer service” and then having absolutely no control over what is being “said by the agents in the living room of the consumer” are the ingredients for all things problematic for the future of this business. Just saying.
Terrific piece, Rob, and thanks for the welcome back.
You’re so welcome, Jay. Welcome back Kotter!!!! 🙂
Walmart and Nordstrom? That a Faulty Comparison.
The analogy is off, try Walmart and Amazon..
Walmart being the agent, 90% agents I see have very little VAP and make 3% for what?? I’ve seen cleaner looking copy and photos on Airbnb posts.
Amazon being the technology play, this is more similar to the iBuyer..
I think once the optics and analogies get dialed in, people will stop missing the forest for the trees and realize a foundational shift is taking place.
At the end of the day, I’m betting on Amazon over Borders and Orbitz over “Dave’s Sea the World Travel” agency.
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