Many industries have already been disrupted or transformed by the internet and the technologies that enable it. Unlike those industries, which have been overtaken by new players, the real estate industry’s transformation is coming from within. This slow implosion comes as online real estate sites and lenders vie for the right combination of services and process improvements that will simplify the home buying experience.
“One click’ shopping has been the goal of lenders and the real estate industry as a whole for the past 15 years — but doing this for a complex transaction, like financing a home purchase, hasn’t been easy. While real estate brokers, lenders, builders, and contractors do their best to guide clients through the home buying or building maze, as the statistics below indicate, homeowners just aren’t buying it.
- 97% of U.S homeowners are frustrated working with multiple vendors during the home buying experience
- 96% of homeowners were not fully confident in choosing the best vendor for their homeownership needs
- 97% expressed appeal in the concept of a trusted/branded network of vendors to choose from for homeownership needs
Who will be the Amazon of real estate?
Zillow, with revenue of $1.33 billion, has set its sights on being a one stop shop for homebuyers and sellers. Earlier this year Zillow announced its plan to purchase 5,000 homes each month over the next three to five years through their “Instant Offer” program. Sellers simply fill out a form and Zillow makes an offer. If the seller accepts the Zillow offer, closing can take place within a matter of days. If the offer is declined, the company will direct the seller to an agent unaffiliated with Zillow to find a buyer. With more than 60% of sellers also looking to buy, Zillow is there to help find the right property and finance the loan. Not quite one click, but certainly a dynamic approach and one to watch closely.
Other companies endeavoring to make one stop shop real estate a reality include:
Rocket Homes. In-House Realty, the Detroit-based subsidiary of Rock Holdings Inc., the nation’s leader in FinTech real estate services, announced in September 2018 that it had rebranded as Rocket Homes. The company is affiliated with a number of mortgage companies. Additionally, Rocket Homes manages a partner network of more than 25,000 premier real estate agents.
Keller Mortgage. Keller Williams has added financing to its business model and promises a closing bonus of $1,000 and zero origination and lender fees.
Opendoor. Like Zillow, Opendoor has instant offers and hopes to build a business model that will help you trade your home as easily as you trade your car.
The Bottom Line
What does this mean for real estate agents? It’s too soon tell. Business consolidation provides economy-of-scale that can make competing in the open market very difficult for smaller players — just look at Amazon and what it did first to the book business and now retail shopping.