“It was the best of times, it was the worst of times…”
The first sentence of A Tale of Two Cities by Charles Dickens applies to our world today, just as it did in 1859. There is little doubt 2020 will go down in the history books for many reasons, including a tectonic shift in home buying and selling.
The slow migration from big cities like New York and San Francisco to so-called secondary cities like Austin and Denver accelerated to a rapid pace when Covid-19 hit in March—as did consumer demand for an entirely digital way to buy and sell homes. The only question now is this: will 2020 go down as the beginning of the end of the real estate agent?
The good news is that agents get to write their own ending.
Zillow and Opendoor both dropped a bomb on real estate agents within the last month, as both essentially proclaimed they aim to become the one-stop-shop to buy and sell a house with a single click—the proverbial Amazon for real estate.
Zillow announced it was getting into the brokerage business to complement its iBuying business powered by 200 million monthly consumers on Zillow who can buy and sell a home using its relatively new mortgage company, title company, and transaction management platform dotloop. And if you believe that Zillow’s agents will only serve its iBuying business, then you must have also believed Zillow’s previous CEO when he said, “We sell ads, not houses,” back in 2013. And then of course, Opendoor announced that it’s going public, touting the fact that 90% of consumers sell directly to them without a real estate agent on page 14 of their investor presentation.
So how will real estate agents compete in 2021 and beyond?
Well, for starters, stop financing your competitors! As long as agents continue to pay Zillow for advertising and leads or bring their sellers Opendoor instant offers, they’re ultimately funding their own demise. One agent said it best to The Real Deal, “Why am I buying leads from my competitor?”
Next, fight for your market share by offering your customers better solutions! On page four of that same investor presentation, Opendoor points out that, with just 4% market share, they can build a $50 billion business. Guess who has the other 96% market share today? Agents!
One solution to keep control of that market share is for agents to provide unique value propositions by partnering with other innovative companies in the space. Knock, for example, is a real estate technology platform that allows customers to buy before they sell using their technology and the financing included with the Knock Home Swap™. Knock works exclusively through real estate agents. Customers get an incredibly certain and convenient option, maximizing their equity and minimizing costs, while their agent gets to represent both sides and keep the entire commission.
“When we think about the crazy market that we’re in right now—if clients can qualify for the [Knock] program and then make a non-contingent offer, that’s huge. There is a need, and this program allows clients to move and make dreams happen. Knock is a no-brainer,” said Lyndsey Harp, a Realtor at Atlanta Communities brokerage in Georgia.
Alicia Windom, a Realtor at JP and Associate Realtors in Dallas, says, “It took away a lot of ‘what if’s for my client and gave them the liberty to purchase at will. And for us as Realtors, it’s a plus because we get two deals in one.”
But whether you partner with Knock or other companies, make sure they are all-in on real estate agents, not partnering with you on one side and using the money you paid them to compete with you on the other.
Find out more about Knock Home Swap™ and how you can become a Knock Certified Agent today.