6 Consumer Types Who Would Benefit From Opendoor
“Hi, I’m Jay. I’m with Zillow, don’t be hatin’.”
This is how Jay Thompson, Social Media Manager for Zillow Group, introduced himself at a conference, recently. A laid-back, unassuming guy, Jay had worn a blue t-shirt with the company name across the back and we joked that he’d have been just as effective had he worn a shirt with an actual target.
Why would he need to be ready to defend himself in a group of adult, industry professionals? Why does this industry spend so much of it’s collective time lamenting over change, advances in technology and new tools? Ultimately, that’s all Zillow is: a tool. It has proven to be a lucrative tool for some and less so for others, but the last decade has been dedicated, on some level, to hating all things Zillow.
Well, good news for Jay and Zillow Group- the industry has found a new whipping boy: Opendoor.
It amazes me that agents are spending so much time knocking this new model and berating anyone who may have considered the service. I am less concerned with the Opendoor model (and similar models by new competitors on the scene, like OfferPad.) and more concerned with the short-sightedness of practitioners in our industry. It seems that the bulk of the real estate industry is not adapting well to the needs of the consumer, regardless of age. Not all consumers want or need someone to hold their hand. Though not exclusively, many of those consumer needs are tied to tech. Being able to post an exterior shot of your new listing to Instagram does not count as being up to speed. Believe it or not, it’s not a millennial-specific issue; there are Grandmas surfing the web. Effectively.
If you are really unable to come up with a reason that someone would choose to do business with Opendoor, other than “they’re lazy,” you might consider reevaluating your profession. As Realtors, it is our job to look out for our client’s best interest. That may or may not be Opendoor, but name-calling the consumer base that would consider it is probably not the best way to make friends and influence people.
As I’ve previously written, there are many, valid reasons why a Opendoor model would be very beneficial for certain segments of the market. Most of those will boil down to one word: control. When homeowners go through the listing and selling process, so much is out of their control. The market value, the showing schedule (to an extent), the buyer’s offer (and whether they agree with the seller’s definition of “reasonable”), the inspection dates, the appraisal appointment, the closing process and probably 50 other things are not up to the seller. Some people need to be in control. Anyone who has ever had an engineer, pilot or other significantly Type A client can attest to this.
Where Opendoor will excel is in returning that purchase/sale to a business deal. They’ll take the personality out of the situations and facilitate a buy/sell transaction. For example:
The Opendoor model is ideal for investors; it breaks the process down to exactly what it is: a business transaction. There is no personality involved, it doesn’t matter that it was your first house or that your kids wrote their names in the concrete sidewalk. It’s real property. A commodity. This streamlined process is perfect for those who don’t need or want to negotiate, or who don’t want their five year plan held up by sentimentality.
The Opendoor model will appeal to a sector of the millennial market, a group that outsources to specialty fields more often than they DIY. They tend to pay more attention to the time/money balance. The millennial seller could go through the dog and pony show described previously and potentially earn higher proceeds from the sale, but they’ll be at the whim of everyone else involved in the transaction and there is no guarantee the house will sell. Millennials, the ones everyone loves to hate, may not feel like the gamble is worth it. You may not agree, but that doesn’t change the fact that there is an entire demographic that thinks this way and ignoring them may not be the best course of action.
The obvious group to benefit from Opendoor’s system is those on a tight schedule. It seems that there would be great benefit to relo companies, once they do a cost analysis of the referral and possible buy-back situation already in play. I can see Opendoor dedicating a team solely to developing this market sector, if they haven’t already.
This is a situation in which an already difficult circumstance might be made a little easier. When several siblings from across the country, with busy lives of their own, have to deal with the sale of a deceased parent’s property, it can get messy, time-consuming and there may be up front cost that someone will have to provide. Opendoor offers a solution.
They may be ready to pull the trigger on the next property, but what if their current home hasn’t sold, or they are in a competitive market where including a home sale contingency makes for a weak offer? What if that DTI needs to come down before they can get past underwriting? Being able to quickly remove their mortgage from their household ledger could be a key factor. Opendoor solves that problem.
If ever there was a case for an abbreviated sale process, it would be the legal battle over and dissolution of a marriage. Taking the personality out of the sale and bringing it back to a business transaction can be of great consumer benefit.
The reality is that, while money is an important consideration, it is not the only consideration and we would be well advised to remember that.
I have a feeling that the majority of the grumbling is coming from the residential resale side of the industry. Commercial agents and agents who work primarily with investors are likely to already see the benefits of the Opendoor model and are probably irritated they didn’t think of the concept first.
In most markets, you’ll hear agents say things like, “There’s enough pie for everyone, I just want my piece.” However, this lip service doesn’t seem to apply to innovation. Once again, there seems to be a rising fear -at a near-Zillowesque level- that Big, Bad Tech is coming for all the jobs.
It’s not, so enough already.
Too often, residential agents are stuck in the mindset that they control the engineering of the American Dream, never pausing to wonder if that dream may have changed. These traditional agents have taken so little time to understand their purpose and establish their value, that control -there’s that word again- of the buy/sell transaction is all they have left. They spend as much time justifying their cost and explaining how expensive their dues are, as they do changing the AAA batteries in their camera so they can take pictures of the new listing. These agents seem to think that a person couldn’t possibly buy or sell a home without someone to hold their hand through the process. The consumer is swept into an intimidating, laborious and expensive process and has nothing standing between them and certain doom on Craigslist, except their Super Realtor!
When did martyrdom become a career goal?
Obviously, there are some amazing Realtors who bring tremendous value to the consumer and the marketplace, regardless of whether they think Opendoor is a good idea. Moreover, there are certainly negatives to consider, when evaluating the ease of this new platform. Whether a buyer or seller chooses to work with tradition or tech, neither side is flawless.
Maybe some new idea, format or technology, originating from these forward-thinkers, -whether it’s Zillow, Opendoor, Purple Bricks or something else not yet on our radar- will be applicable to, helpful in and revenue generating for everyone’s business. Working together is the key. Instead of being resistant to change, maybe those that make up the front lines of the industry could, if not be excited about it, at least be interested in it?