The true property trade has seen loads of technological upheavals because the pandemic started.
As brokers confronted the unprecedented uncertainty of the previous yr, they shortly adopted instruments to maintain gross sales transferring, from video excursions to 3D walkthroughs to FaceTime showings.
However that’s not the one digital transformation going on in real estate. For a while the trade has seen an increase in iBuyers—actual property firms that buy a vendor’s house with money, on-line, bypassing actual property brokers solely. Some examples of iBuyers are Opendoor, Offerpad, Redfin Now, and Zillow Prompt Provides. This might be the start of significant modifications in the true property trade, and big bother for brokers—in the event that they don’t discover methods to compete.
One company main the best way when it comes to staying aggressive is Feely Group, a Canadian digital actual property company run by entrepreneur Kevin Feely. Just like the U.S. residential actual property market, the Canadian residential market noticed a robust yr in 2020—in addition to a rise in iBuyer transactions. I spoke with Feely not too long ago about what actual property companies needs to be doing within the face of this new growth.
Shama Hyder: Inform me how the rise in iBuyers is altering the true property trade.
Kevin Feely: iBuyers and low cost brokerages are gaining recognition as shoppers look to keep away from paying realtor charges.
This isn’t only a main risk—it will probably really be the profession loss of life of mediocre realtors who don’t know how you can present worth and exceed their purchasers’ expectations. The easiest way to supply this worth is thru our skilled advertising and marketing and negotiation abilities. Brokers should at all times be adapting to new advertising and marketing methods and strategies on how you can get their sellers extra of their pocket.
Hyder: What recommendation would you give to brokers who’re struggling to compete with this new choice?
Feely: My first tip is to at all times be advertising and marketing and prospecting. At Feely Group, we’re at all times working adverts and including consumers to our database. We have now so many consumers that we promote 30 p.c of our listings with out hitting the market.
Not solely can we present the sellers the value and shutting they need with out having tons of strangers strolling by way of their home (particularly throughout Covid) however we’re additionally in a position to present our consumers with unique entry to their dream houses earlier than different consumers.
Second, it’s essential to notice that 69% of house sellers don’t use the realtor they purchased their home with. That is as a result of most brokers see their purchasers as one sale, after which they transfer on.
As an alternative, notice that you could possibly—and will—be growing long-term relationships with these purchasers. They could not purchase or promote once more for 10 years, however after they do, they’ll consider you. We pleasure ourselves on going the additional mile for purchasers, and 50% of all our enterprise is repeat clients.
Think about methods you can provide concrete advantages to your purchasers that they received’t get by way of different companies. For instance, everybody says they’ll promote your property for probably the most amount of cash. Or what? The itemizing expires.
We’ll really give our purchasers a money provide on their house as an insurance coverage coverage, and we’ll purchase it if it doesn’t promote. As we at the moment are in a very popular vendor’s market, we’ve tailored our provide. We now provide to promote our consumer’s houses for 101% of market worth or we’ll pay them the distinction! If that is too dangerous or not doable to your company, consider different methods you’ll be able to present worth.
Lastly, I’d advise any agent to affix a progressive crew or brokerage. iBuyers won’t solely be the loss of life of the mediocre actual property agent, but in addition the loss of life of the mediocre actual property brokerage.
Most brokerages are caught prior to now relating to how issues have been executed and haven’t included know-how the best way they should. The reality is that they’ll all be phased out very quickly. Select an company that’s on the rise and offers you the power to develop. When selecting a brokerage, ask your self the identical query your purchasers ask you: How can I profit from this? What’s in it for me?
The true property trade has defied expectations all through the pandemic, popping out stronger than earlier than, whereas additionally proving itself to be extremely adaptable. As extra younger entrepreneurs like Feely enter actual property I imagine that we’ll see what he predicts: a phasing out of companies that haven’t managed to adapt, whereas the trade itself evolves right into a extra high-tech, totally digital mannequin.