Where is the Nexus? — RISMedia
Chris KellyPresident and CEO, Ebby Halliday Companies, North Texas;
2022 Broker Liaison, National Association of REALTORS® (NAR)
Hobby HannaPresident, Howard Hanna Real Estate Services, Pittsburgh, Pennsylvania
Sherry Chris, President and CEO, Expansion Brands, Realogy Holdings Corp., Madison, New Jersey
Rei MesaPresident, Berkshire Hathaway HomeServices Florida Realty, Sunrise, Florida
Chris Kelly: If there is one constant in real estate, it is that there is no constant. The market changes all the time and so does the practice of selling real estate, especially in the age of technology. Yet in the seven or eight years since iBuying emerged, it has attracted tons of text and tons of dialogue as an instant, hassle-free shopping solution. So what are the pros and cons of the iBuyer strategy? How does this impact our industry? Perhaps more importantly, what can brokers and agents learn from it and can we adapt to improve the way we do business? Hoby, how do you see it?
Hoby Hanna: Well, you’re right, Chris. It’s a hot topic. But I think there’s been a lot more hype about it than general consumer needs or wants. It’s not available in all markets, for one thing, and while it has its place in the scheme of things, it really only fills a need for a small segment of sellers. We have partnered with Zavvie in order to keep our agents at the center of the transaction, whatever solution works for the client, but we do not see iBuying as a threat to traditional real estate, especially in today’s market.
Sherry Chris: iBuying works for those who want to sell at a discount in exchange for an instant sale – owners who want to skip viewings, perhaps, or heirs who want to cash in right away. There will always be a place for it, which led us to launch our RealSure offering. It’s a program that provides instant solutions to sellers and buyers, and it’s a great tool for our agents to have in their back pocket, but it’s likely to be the most popular in a more balanced market.
Rei Mesa: I am okay. The iBuyer offer is currently limited to a few of our markets and in any case is less relevant in the current low inventory environment as prices rise and most homes are selling very quickly.
CK: You may be right. According to some sources, even in cities with the highest percentage of iBuyer transactions, such as Phoenix or Atlanta, iBuyer transactions represent just under 5% of all sales. But it was a force to be reckoned with at the start of the pandemic, when the market was in a much different place. What should we learn from it?
RM: New offers arise out of need. Even before the pandemic, people were experimenting with real estate models online, and it accelerated when everything shut down. But in every transaction and in almost every market state, the majority of buyers and sellers always want someone on their side. They rely on their agent to know the market, answer questions, negotiate on their behalf. So what we take away from the iBuyer offering is an increased dedication to improving the customer experience in the way that works best.
HH: Rather than being a disruptor, in fact, iBuying inspired us to be more creative. The customer is at the center of everything we do, and the programs we’ve added, like buy-before-sell options and bridge loan options, open up viable new customer options while keeping the agent relevant.
CS: We see iBuying in 24 markets and growing, and we’ve done some research to find out why and when it works. We know we can maintain a competitive advantage by using the best people and adding more to our agents’ toolbox.
CK: I think what you are saying is that iBuying is not an all or nothing trend…
RM: It’s a different way of selling, and it only works for a small percentage of sellers. But it did help us take matters into our own hands and shorten the time from listing to closing, such as doing necessary repairs in advance and doing the title search in advance.
HH: The question should always be: what does this seller need and how can we best provide it? This is how we keep our agents at the center of every transaction.
CS: At this point, while there is an abundance of competing buyers, iBuying is a complementary offering for those who need an immediate sale. At the same time, new technologies will continue to emerge and we need to be responsive as an industry. The goal is always to improve customer service and equip agents with the best resources.
The Power Broker Roundtable is brought to you by the National Association of Realtors® (NAR) and Chris Kelly, NAR Broker Relations Liaison. Watch this column each month, where we address broker issues, concerns, and milestones.