The New Market Shift
February 26, 2019
Sibbach Team – eXp Realty
If you’re a real estate agent seasoned in the industry and your phone hasn’t been ringing as much as it used to, you’re not alone. Similarly, a past client or friend says they decided to buy a new home and they’ve already visited the subdivision, identified the upgrades and need to enlist your services to sell their house. Unfortunately, your phone did not ring for the first sale of the new build, lowering your potential income. The next shift is real and more intimidating because there are more driving forces, welcome the Shift 2.0. (www.agenttruth.com/the-shift-why-your-phone-is-not-going-to-ring-in-2019)
The real estate industry last experienced “The Shift” between 2006-2010 when there was less volume and lower priced sales that ate away at gross commissions earned. Some agents saw an opportunity to shift the focus of their work by working short sales and bank owned sales to rise to the top, while others struggled to remain relevant thinking this was a bad idea. It was a difficult time to be a real estate agent, but the market recovered in due time and phones began to ring again in higher volume with higher priced sales.
This time, however, this shift seems to have permanency, so agents will need to take action to counteract The Shift 2.0. Phones may not start ringing again and it will be difficult for traditional agents who rely solely on referrals to keep up. Why? Because the new emergence of what and who sells real estate has changed.
According to MLS (Multiple Listing Service), January 2019 ended shy of homes sold in the Valley compared to January 2018 by about 12% or about 750 homes. At first glance, it may appear that less homes are being sold overall, but this is only partly true. In reality, more consumers are turning to iBuyers like Open Door, Zillow, Offerpad and large Investor Funds to sell their homes. Most may eventually turnup on MLS but the wholesale market has many turning homes into rentals like AirBNB or VRBO, making it seem as though there are less homes being sold. These websites are responsible for the biggest cannibalization of traditional agent referrals currently. These services send their deals to their partnered agents leaving the traditional agent without the sale and commission.
So, if you’re a traditional agent who relies solely on MLS, you’ll see your business affected by this Shift 2.0. The truth is, it’s getting harder and harder to convince consumers that they need a real estate agent with the rise of technology, and it likely isn’t going away.
When an agent does get a traditional referral lead for a potential client, consumers feel like an informed buyer or seller due to the availability of real estate information on their phone, iPad, mobile device or computer. Many consumers receive offers from Zillow or Opendoor.com or listing from a realtor after a couple of clicks on sites like Trulia or Realtor.com. These “informed” potential clients then make standard excuses of “not looking to buy a house right now,” or “already have an agent.”
There are several things an agent can do to counteract The Shift 2.0:
- Improved Online Presence: Nowadays, EVERYONE Googles EVERYTHING, including you. Your “Googleability” needs to be top-notch. Your website and social pages need to be up-to-date. Agent competition will pop up in their search, and you need to stand out or be part of a network referral site like homelight, upnest or Zillow.
- Always be Learning: In the age of referrals, mediocre agents still did well for themselves because consumers had fewer options. Now, competition is fierce, and you need to be at the top of your game. Consider signing up for continuing education classes or finding a podcast, like the Solution Real Estate podcast, as a way to keep your skills sharp.
- Be Ready for the Objections: People make excuses to those who are trying to sell them something. Identify what makes you valuable and be ready to sell yourself to a potential client.
- Find Your Fit: People want a corporate-like experience where they feel like they’re the only client that matters. A realtor is an individual. If agents aren’t responsive when called upon, someone else will serve them. You need to be better at every aspect of your job. Ultimately, those web services may call upon you to complete the sale for a client, so they’re not the enemy. Learn how to work with them and focus on the experience that best serves the client.