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Trends in Proptech and iBuyers Space

How modern agents can turn homeowners into sellers

Propy’s weekly webinar Episode #19 is with Bill Lublin, CEO, Century 21 Advantage Gold, and Lane Hornung, CEO, zavvie and 8z.

Bill Lublin, CEO, Century 21 Advantage Gold, and Lane Hornung, CEO, zavvie and 8z, along with Propy’s CEO Natalia Karayaneva and Nick Solis, Director of Industry Relations, discuss the most challenging problem facing real estate agents today: the lack of inventory.  Even though there is buyer demand, sellers remain reluctant to list. Our panel shares tips on how to help homeowners make the decision to sell. Also discussed are the latest trends with iBuyers, and why agents need to be open-minded about this trend.

Market trends

Lane Hornung shares that he has seen many brokerages and agents with record sales over the summer months and that markets are rebounding from the initial challenges of the pandemic. Hornung is confident that there won’t be a market crash but expects what he calls a “constriction” due to lack of inventory. Bill Lublin agrees with Hornung.  Prices are being driven up because of the low inventory.  Adding to the low inventory is the lull in new home construction since the 2008 recession.  Lublin explains that the only number that may slow down is the number of units sold.  

Silicon Valley real estate trends

Nick Solis states that in the Bay area, they are seeing a large exodus of people moving out of the city. Many of the tech and white-collar workers don’t need to be onsite to handle their jobs, and they are leaving the city to live in their vacation homes. It’s very appealing for them to now be able to live and work from the places they used to spend their leisure time. 

iBuyers trends and becoming a modern agent

Hornung wants agents to take advantage of this newest trend, and understand that their role becomes even more valuable to their clients with the uptick in iBuyers. Selling a home can be overwhelming for homeowners. Between coping with repairs, keeping the house spotless, and having showings during a pandemic—there are a multitude of things that may be stopping a homeowner from listing.  Hornung explains that iBuyers and bridge solutions can provide needed options for homeowners who are reluctant to list. Because of these trends, he has developed a platform called savvy that empowers agents to bring new offerings to the table for their clients and allows them to choose how they can sell their homes. His traditional brokerage 8z now incorporates the following solutions for their clients:

  • Open market – the traditional way of selling a home.
  • Instant sale –  this is the iBuyer option, which is attractive to many because of the speed and the certainty of the iBuyer. Good option because of the speed, certainty of iBuyer.
  • Bridge solution – this helps those clients who say they can’t sell because they don’t know where they will move to. This option allows them to buy their next property before they sell their current home. 
  • Listing concierge – this option fronts the cash needed to make repairs and improvements for those sellers who are tight on cash but want their house in tip-top shape before listing.

Hornung states that these services help to create a modern agent. The role of an agent becomes even more valuable as an advisor to their clients with these new options. Sellers must be well represented with a myriad of selling options to decide from.

iBuyers Market Share

Lublin doesn’t feel that iBuyers will ever be in a large enough proportion in the market place to disrupt the real estate industry.  Estimates from Morgan Stanley suggest that by 2030 perhaps 10% of the market may be with iBuyers.  Hornung wants to bring that statistic down to the agent level. The reality is that companies like Zillow have been around for a decade, and iBuyers aren’t going away. As an agent, if you do twenty transactions a year, maybe a couple will be with iBuyers. You still earn your commission. Maybe a few will use a bridge solution. You still represented your seller and earned your commission.  That’s what agents need to focus on: representing their sellers. Solis agrees and says the agents either live in fear of everything new coming up because they think it will remove them from the transaction, or they are in denial about the changes and say everything is good. In reality, it is somewhere between those extremes.  Solis continues by providing the scenario that an agent is talking to a potential seller, who tells them that they saw an ad for someone who will buy their house for cash today and want to look at that option.  Instead of waiting to see if that seller will come back to you, it’s much better to be able to say that you can also offer those options, and take a look at them together. 

An agent needs to stress to their seller that they want to be sure they are represented regardless of what option they choose.

A different business model

Lublin explains that start-ups have a very different business model than a brokerage. Start-ups come into the business with venture capital money, and that VC wants to know what the exit strategy is, and when the pay-off is going to be. They may invest in ten different companies at once, with the expectation that three will take off and make them a lot of money. Start-ups either become an IPO or are sold. Zillow is now a public company, so they don’t have to be profitable. As long as people keep buying their stock, they are good.  As a broker or an agent, we come to work to make a living. My company has to be profitable. He looks at all start-ups and new technologies from the perspective of will this make my agents work more efficiently and make more money. Hornung agrees and states that he thinks that the modern agent embracing these new technologies like Propy will end up doing twice as many deals because of the efficiency the tools will bring to the table. The increased transparency for the consumer is key to making the life of a realtor easier. 

Top tips for the modern agent

Hornung suggests that agents need to start looking at their database of past clients and categorize them by who has the most equity. Think about the reasons they aren’t thinking about selling. Are they worried about where they would move? Did they take a financial hit or lost their job due to the pandemic? Or is it simply too overwhelming to consider getting the house ready to sell with the kids, pets, and the concerns of having strangers in their home during a pandemic? Commit to calling five of these past clients every day, and have a conversation with them. The script is simple:

“I haven’t talked to you in a while and wanted to check-in. I hope your family is doing well during COVID. You’ve probably heard by now that the real estate market is on fire with a lot of demand and not much inventory, which is driving prices up. I wanted to let you know that my brokerage has been busy coming up with new ways to make it easier to sell your home.  I know you’re not in the market to sell, but I want you to know about these options so you can tuck them away and think about it when the time is right. I care about you and your family and you should know what options are available. If you’re interested, we can get on a Zoom call and I can tell you about them.”

Lublin shares that one of his approaches is to look at his database for people who have been in their homes longer than the statistical average, and work those prospects. Another approach is to look for properties for rent and to call the owners to discuss the option of selling. If they respond that they’re not interested in selling, they may also say they love investing and are looking for more properties. This gives you an opportunity to find out what they’re looking for and offer to help them find it. Other people may be thinking about selling, but are uncomfortable with having people going through the property. In that situation, Lublin recommends that his agents share the safety protocols they have around COVID and how they work to keep their sellers safe.

What technology needs to do

Hornung says that technology needs to do one of two things: It either generates new business, or it makes my agents more efficient.  Something as simple as reducing the escrow time from 30 days to 27 days allows agents to transact one more deal, which puts more money in their pocket. Using Propy, especially the offer management tool during multiple offer situations, is taking a lot of those administrative details that eat into the time of an agent and streamlines it. 

Lublin agrees that technologies need to be about lead generation or creating a profit. He sees that compression of the transaction time through using Propy will lead to increased profits. It used to take 90 days to close when he first started in real estate, and the only time you saw a closing at 30 days was with a cash offer. Now the standard is 30 days to close, and Propy is looking to reduce that even further. First you have the idea, and then the technology will happen.

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