The rise of the buyer and what your real estate agency needs to be competitive: an interview
The real estate sector has seen many technological upheavals since the start of the pandemic.
As agents grappled with the unprecedented uncertainty of the past year, they quickly adopted tools to keep sales moving, from video tours to 3D walkthroughs to FaceTime screenings.
But that’s not the only digital transformation happening in real estate. For some time now, the industry has seen an increase in the number of iBuyers, real estate companies that buy a seller’s home for cash, online, bypassing real estate agents entirely. Some examples of iBuyers are Opendoor, Offerpad, Redfin Now and Zillow Instant Offers. This could be the start of serious changes in the real estate industry and huge problems for agents, if they can’t find ways to compete.
Feely Group, a Canadian digital real estate agency led by entrepreneur Kevin Feely, is an agency that is leading the way in terms of competitiveness. Like the US residential real estate market, the Canadian residential market had a strong year in 2020, along with an increase in iBuyer transactions. I recently spoke with Feely about what real estate agencies should deal with this new development.
Shama Hyder: Tell me how the increase in the number of iBuyers is changing the real estate industry.
Kevin Feely: iBuyers and discount brokers are growing in popularity as consumers seek to avoid paying realtor fees.
This isn’t just a major threat – it can actually be career death for mediocre real estate agents who don’t know how to deliver value and exceed their clients’ expectations. The best way to deliver this value is through our professional marketing and negotiation skills. Agents must always adapt to new marketing strategies and methods on how to get more of their salespeople in their pocket.
Hyde: What advice would you give to agents struggling to compete with this new option?
Feely: My first piece of advice is to always be marketing and prospecting. At Feely Group, we are constantly posting ads and adding buyers to our database. We have so many buyers that we sell 30% of our listings without hitting the market.
Not only are we able to provide sellers with the price and close they want without having tons of strangers walking through their house (especially during Covid), but we are also able to provide our buyers with exclusive access their dream home before other buyers.
Second, it is important to note that 69% of home sellers do not do use the real estate agent with whom they bought their house. This is because most agents see their clients as one sale and then move on.
Instead, realize that you could – and should – develop long-term relationships with these customers. They might not buy or resell for 10 years, but when they do, they’ll be thinking of you. We pride ourselves on going the extra mile for our customers, and 50% of all our business is repeat customers.
Consider ways to offer your clients tangible benefits that they won’t get through other agencies. For example, everyone says they will sell your house for the highest price. Or what? The list expires.
We’ll actually make our clients a cash offer on their home as an insurance policy, and we’ll buy it if it doesn’t sell. As we are now in a very seller’s market, we have adapted our offer. We are now offering to sell our clients’ homes at 101% of market value or we will pay them the difference! If that’s too risky or impossible for your agency, think about other ways to add value.
Finally, I would advise any agent to join a progressive team or brokerage. iBuyers won’t just be the death of mediocre real estate agent, but also the death of mediocre real estate brokerage.
Most brokers are stuck in the past when it comes to how things were done and haven’t integrated technology the way they should. The truth is that they will all be eliminated very soon. Choose an agency that has the wind in its sails and gives you the opportunity to grow. When choosing a brokerage, ask yourself the same question your clients ask you: how can I benefit? What’s in it for me?
The real estate sector has defied expectations throughout the pandemic, emerging stronger than before, while proving highly adaptable. As more young entrepreneurs like Feely enter real estate, I think we’ll see what he predicts: a phasing out of agencies that have failed to adapt, while the industry -even is evolving towards a more high-tech and fully digital model.