In 2018, 9.6% of residential properties were sold to iBuyers — a steady increase of around three percent annually, up from 3.9% in 2016 and 6.6% in 2017. The face of consumerism is changing, and online home sales are becoming a larger part of the market.
While people’s needs remain largely the same, the manner in which they acquire goods & services is shifting. The closure of major department stores across the nation has been attributed to the increase in popularity of online shopping.
Real Estate is no different. Innovators have been finding ways to make it easier for the consumer to find a ‘one-stop shop’ for all things Real Estate: thus the emergence of iBuyers.
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What are iBuyers?
iBuyers offer what many of the apps and sites mentioned above offer: convenience. An iBuyer is a company that leverages technology to make offers and purchase homes instantly, directly from the seller. They aim to bypass the need for a realtor or broker by offering to purchase the house and taking on the burden of the tedious listing and sale process. Sellers don’t have to pay an agent, list the home, stage it, market it, or even show it to potential buyers. Instead, they tell the iBuyer about the property — things like its age, condition, zip code, etc. — and using data and mathematical algorithms, the iBuyer predicts the home’s future value. Currently, different iBuyers’ operations vary, but the bottom line for all of them is that they want to make the process simpler for their consumers.
Are traditional Real Estate Businesses in Trouble?
For now, the answer is no. While there may be a concern that iBuyers will take over the Real Estate industry, iBuyers are not foolproof. Initially, the idea of faster sales and less legwork may appeal to many; however; iBuyers still have significant flaws and areas for improvement. 9 out of 10 consumers ultimately pass-up offers from iBuyers. This is due to the fact that despite their promises of virtually painless transactions, iBuyers offers will still be significantly lower than that of a traditional sale. Furthermore, the availability of iBuyers is not yet wide-spread and is still quite limited. It should also be taken into account that iBuyers are quite selective about the homes they purchase, and many are not eligible due to their criteria of the home’s state, appearance, etc.
iBuyers still lack one crucial feature that only you can offer: a customized experience and a personal connection. Even though iBuyers have aggressively been advertising their services and appear to have all the shiny bells and whistles, at the end of the day, the consumer is but an algorithm, and that can make all the difference in their decisions. iBuyers should not be ignored and focusing on strategies within your business that will be able to supersede what an iBuyer can offer should be taken into account.
Should You Focus On iBuyers?
With technological innovations in Real Estate like iBuyers growing in popularity, how much money and time should you be investing in technology versus developing your skills as a Real Estate professional?
The short answer is that you have to find a balance between the two. You will have to determine which systems and technology will benefit you the most and determine whether you & your team have the skills to utilize them effectively.
“The first rule of any technology used in business is that automation applied to an efficient operation will magnify that efficiency. The second rule is that automation applied to an inefficient operation will magnify that inefficiency.”– Bill Gates
If you are efficient in a task, finding the proper tool will only boost your productivity, however, if you acquire a tool for something you are not skilled at, it will not help you at all. A hammer is magical in a carpenter’s hands but useless in a layman’s. We often see people rely on tools more than skill, but the reality is that a toll does not make you more skillful. A tool in experienced hands, however, allows you to master that tool.
Using technology is not a bad thing. In fact, it enhances our lives and our businesses in many ways. However, we should not let it take over everything and forget the power of our skills. Text messaging, emails and social media can be fantastic tools for your business, but never forget the power of a phone call or a face to face interaction either, nor should you forget about using the most useful aspects of these skills when using technology.
Finding a balance between your skills and technology by assessing what your skills are and figuring out which tools will enhance those efficiencies can be tricky, but if you know what your goals are and focus on what technology can augment what is already working well rather than just buying into what is popular or hyped-up, then you are on the right track.
Building a team that can learn and develop skills as well as brings leverage by giving you time to not only focus on the revenue productive activities in your business but to develop skills of your own is possible with MyOutDesk. Don’t forget to schedule your Double My Business Strategy Session!