Innovation and disruption happen in every industry, but in some industries, it happens at a slower pace. Real estate is without a question one of those slower industries and for many reasons. We’ve listed a few of them below:
- Inefficient market - There are so many variables in the home buying process that applying big data and automation to it is nearly impossible. A computer cannot possibly provide buyers with the information they need to make the biggest purchase of their life like an agent from the area can. This creates an imperfect market.
- It’s a very human industry - Sellers and buyers want people to be a part of the process given a home is likely the most expensive thing they will ever buy or sell. They want to work with people to help guide them through the process.
- Fragmentation - One of the primary drivers of disruption is access to large amounts of data. Given how fragmented data is in the industry, companies have a hard time finding blanket solutions that can be adopted by the masses. Zillow has had the most success at this to date but they are still not the source of truth.
That being said, all industries will succumb to innovation and disruption. Real estate will be no different. One of the major trends happening in the space right now is called iBuying. The concept is nothing new. It is essentially taking what flippers and investors have been doing for ages and digitizes much of the process. Basically, an iBuyer offers to buy a home from a seller quickly without involving an agent and then flips that home quickly for a profit after repairs and such are completed. The seller gets to avoid many of the common pains of selling a home and gets to sell it relatively quickly. So home sellers are using iBuyers for convenience, speed, and flexibility. The primary reason a seller wouldn’t use an iBuyer would be the fact they won’t get the most money possible selling the home. iBuyers are not incentivized to help the seller get the best price. Agents are though! That 3% fee that goes to an agent is worth it in most cases given they are fighting for the highest offer on your behalf.
Speaking of fees, iBuyers take a service fee that comes out to be about the same as paying an agent so the cost of selling a home is not part of the equation. It is purely a convenience play.
So is iBuying the future? Yes and No... For many people that want to get rid of a home quickly without the hassle regardless of the price, iBuyers will be the way to go in the markets it is available in. BUT for the vast majority of homes being sold in the foreseeable future, an agent will be involved. You cannot automate the home buying process yet given the constraints I mentioned at the beginning of the article. An agent will always be there to help guide the process and tackle the challenges that arise.
Our goal at Symba is to help agents make their client’s experience as seamless and convenient as possible by giving the agent and their team the best CRM user experience in the industry. If you're a team leader or agent and you’d like to learn more, please reach out!
