The real estate industry has seen plenty of technological upheavals since the pandemic began.
As agents faced the unprecedented uncertainty of the past year, they quickly adopted tools to keep sales moving, from video tours to 3D walkthroughs to FaceTime showings.
But that’s not the only digital transformation going on in real estate. For some time the industry has seen a rise in iBuyers—real estate companies that purchase a seller’s home with cash, online, bypassing real estate agents entirely. Some examples of iBuyers are Opendoor, Offerpad, Redfin Now, and Zillow Instant Offers. This could be the beginning of serious changes in the real estate industry, and huge trouble for agents—if they don’t find ways to compete.
One agency leading the way in terms of staying competitive is Feely Group, a Canadian digital real estate agency run by entrepreneur Kevin Feely. Like the U.S. residential real estate market, the Canadian residential market saw a strong year in 2020—as well as an increase in iBuyer transactions. I spoke with Feely recently about what real estate agencies should be doing in the face of this new development.
Shama Hyder: Tell me how the rise in iBuyers is changing the real estate industry.
Kevin Feely: iBuyers and discount brokerages are gaining popularity as consumers look to avoid paying realtor fees.
This is not just a major threat—it can actually be the career death of mediocre realtors who don’t know how to provide value and exceed their clients’ expectations. The best way to provide this value is through our professional marketing and negotiation skills. Agents must always be adapting to new marketing strategies and methods on how to get their sellers more in their pocket.
Hyder: What advice would you give to agents who are struggling to compete with this new option?
Feely: My first tip is to always be marketing and prospecting. At Feely Group, we’re always running ads and adding buyers to our database. We have so many buyers that we sell 30 percent of our listings without hitting the market.
Not only are we able to provide the sellers the price and closing 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 to their dream homes before other buyers.
Second, it’s important to note that 69% of home sellers don’t use the realtor they bought their house with. That’s because most agents see their clients as one sale, and then they move on.
Instead, realize that you could—and should—be developing long-term relationships with those clients. They may not buy or sell again for 10 years, but when they do, they’ll think of you. We pride ourselves on going the extra mile for clients, and 50% of all our business is repeat customers.
Consider ways that you can offer concrete benefits to your clients that they won’t get through other agencies. For example, everyone says they’ll sell your home for the most amount of money. Or what? The listing expires.
We will actually give 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 hot seller’s market, we’ve adapted our offer. We now offer to sell our client’s homes for 101% of market value or we’ll pay them the difference! If that’s too risky or not possible for your agency, think of other ways you can provide value.
Finally, I’d advise any agent to join a progressive team or brokerage. iBuyers will not only be the death of the mediocre real estate agent, but also the death of the mediocre real estate brokerage.
Most brokerages are stuck in the past when it comes to how things were done and haven’t incorporated technology the way they need to. The truth is they’ll all be phased out very soon. Choose an agency that’s on the rise and gives you the ability to grow. When choosing a brokerage, ask yourself the same question your clients ask you: How can I benefit from this? What’s in it for me?
The real estate industry has defied expectations throughout the pandemic, coming out stronger than before, while also proving itself to be highly adaptable. As more young entrepreneurs like Feely enter real estate I believe that we’ll see what he predicts: a phasing out of agencies that haven’t managed to adapt, while the industry itself evolves into a more high-tech, fully digital model.