The Rise of the iBuyer & Others
I’ve been pondering the iBuyer epidemic for quite a while, especially with the emergence of Zillow’s Instant Offers. Why are companies such as Opendoor and Offerpad gaining so much traction? Why are discount brokerages and flat fee programs gaining market share? It’s a trust factor.
My argument is based on two basic marketing principles. First, we know that people will only buy from those they trust (or think they trust).
The second is based on the laws of marketing and branding. Companies spend billions of dollars each year on their marketing and branding efforts. They know that once their brand is recognized, their brand will become familiar to the consumer and familiarity leads to trust.
That’s why when you go to the store to buy a product you’ve never used; you will gravitate to the brand you recognize. You might even be willing to pay more money because your brain tells you the brand can be trusted. This may be only due to the fact you seen or heard their commercials over and over or a friend has recommended it to you.
There is the perception that there’s a vacuum of agents consumers feel they can trust. In the absence of trustworthy agents, consumers will gravitate towards who or what their brain is telling them they can trust. iBuyers have millions of marketing dollars at their disposal. They are all over the radio, television, billboards, social media, etc.
Our past, present and future buyers and sellers recognize these other brokerages and programs. They are now familiar with them. And for better or worse, their brains tell them they can be trusted. They are kicking our butts because they have the resources to out-market us. This is why they are continuing to thrive.
To the consumer, it’s a jungle out there when it comes to real estate agents. They see different agents holding open houses in their neighborhood each and every weekend. They are getting flyers and postcards from multiple agents. They are probably on drip campaigns from a variety of agents as well. The agent who did sell them their home is probably lacking the proper follow-up system. They don’t know who to choose and who they can trust.
So, what’s the solution – building loyalty among your clients and sphere of influence. Since the average agent can’t compete with the marketing budgets of these companies, they have to find alternative ways to build trust from their consumers. The only way you can do that is by focusing on building long-lasting relationships with those who will buy from you or refer you to those who might buy from you.
iBuyers are focused on their bottom lines. Discount and flat fee programs tend to (but not always) require volume to turn profits. Neither are great relationship-building models. This provides you with a tremendous window of opportunity.
It’s not a new concept. However, today’s real estate agent has relied too heavily on technology to maintain their relationships. Many of us are too busy trying to sell consumers rather than trying to build long-lasting relationships based on trust.
There is one thing we can do better than iBuyers and discount programs; we can out relationship them. Be the one your consumers go to when they have questions and real estate needs.
I understand that it may not be that simple. It requires effort, strategies and systems. In the coming months I will be writing a series of blogs to help you earn a six-figure income through relationships and staying top of mind. I will also be hosting a series of trainings on the subject. Email me at firstname.lastname@example.org for more information.
By Mike Weinstein, MBA