Real Estate Disruptors: Opendoor, Zillow, Redfin, Offerpad, iBuyers


Real estate disruptors. Maybe you’ve heard of them, maybe you haven’t. I’m talking about Zillow Instant Offers. I’m talking about Opendoor. I’m talking about RedfinNow. I’m talking about Offerpad and a whole slew
of others, collectively known as iBuyers. What do they do? How are they going to impact the real estate
business? More specifically how are they going to impact
your business? That’s what we’re talking about today, but
before we go there, click the subscribe button, ring that notification bell because I post
cool stuff like this each and every week, and you don’t want to miss it. All right, let’s do this. Success in real estate has nothing to do with
shiny objects. It has everything to do with mastering the
basics. The three pillars of real estate investing,
attract, convert, exit. Matt Theriault has been helping real estate
investors do just that for more than a decade now. If you want to make money in real estate keep
listening. If you want it faster visit REIACE.com. Here’s Matt. Hey, Matt Theriault here from Epic Real Estate. Today we’re going to talk about real estate
disruptors, and specifically we’re going to talk about ibuyers. What do they do? What do they mean to your business, and what
is there that you can do about it? So, if you’re not aware ibuyers, they’re companies
that are purchasing homes right online, right through the internet, right there on your
computer, in a way that they don’t have to pay any agent fees. They don’t have to fix up their house, they
don’t have to sit around and wait for buyers. I mean, they hardly have to even talk to a
person. Instead with just a few swipes of the keyboard,
ibuyers are presenting sellers with offers, and within a few days or a few weeks, if the
seller finds the offer acceptable, that’s the part that the ibuyers aren’t telling you
about, and we’ll get to that. But if the seller does find the offer acceptable,
they’ll receive their proceeds with relative ease. And this new process, it’s causing a real
stir amongst real estate agents and real estate investors alike. So should they be worried? Should you be worried? What does this mean for us real estate investors? I get that specific question from my clients
all the time and understandably so, but here’s the thing. Back in 2001 when I became a real estate agent,
there were about 1.1 million licensed realtors in the market. And everyone that I knew at that moment was
really concerned about technology replacing them. Here we are today, almost two decades later,
and there are 1.3 million approximately licensed realtors. They’re not being replaced. There’s actually more of them today than there
was then. Here’s the deal. A person’s home is typically their most valuable
asset. And there’s a lot of emotion behind the sale
of that home of which means it’s been a lot tougher than the ibuyers had anticipated in
removing the personal element from the sales process. You see every house you buy or sell is going
to be from or to another person. It’s a people business, and the numbers are
showing that people would still rather deal with people when it comes to the sale of their
property. Technology over time may educate the public
that this is a good way to go about selling a house. I’m not blind to that potential. The fact that ibuyers are taking this so seriously,
what that tells me is that you and I, we are in the right business and they want a piece
of it. But, it’s going to take a really long time
for them to cut into our market share. For example, I purchased a home last month
from someone that still doesn’t even have an email address, and that’s not an uncommon
occurrence for us. The point being the ibuyers, they’ve got a
lot of work to do. And even more so, I think they’ve got a lot
of waiting to do before the public accepts their ways as the norm. But I certainly don’t have a crystal ball,
yet I’ve been doing this long enough to where I’m trusting more and more my crystal intuition. It’s a people business. With regard to ibuyers over here inside of
my business it’s not changing the way that we’re doing things, and I don’t think it’s
going to have an impact for a very long time. There’s still plenty of time for you and I
to go out and make our fortunes flipping houses, holding houses, building our real estate portfolios. But you know, I am curious. Am I the only one that is thinking this way? So I just got back from a conference, I’m
back home now. This is my new backyard. At this conference there were more than a
hundred of the most successful real estate investors in the country. What I did was I recorded a few of their answers
to this question just for you. What are your thoughts on companies like OpenDoor
and Zillow Instant Offers and RedFinNow and OfferPad, and how they’re buying houses directly
through their websites. How is it impacting the way that you are doing
business? Well, first off, great question. Second off, I admire them for their technology
and what they have brought to the marketplace. They literally streamlined anybody that wants
to sell, they streamlined that process of actually getting to an offer. But the competitive advantage I think we have
over those different companies, especially in Phoenix, because they’re everywhere, is
the person, the personality, finding the solution to the problem. So that’s our competitive advantage. Although they do a ton of business of course,
but we are talking to other people that have not had a good experience with them. And because we have that personal experience,
we’re able to win the business from them so. It’s interesting you asked that because I’m
in Birmingham, Alabama, and it really has not affected us that much. So I can’t really talk about that intelligently,
but I know it’s affecting other markets. I know it’s coming, but it really hasn’t affected
us at all yet. Well I think those companies are more going
to affect the list and sell realtor than they are the real estate investors. They’re not problematic buyers. Real estate investors buy assets that needs
a problem solved, and those guys are not really solving a problem. They’re just making the transaction more efficient
than listing and selling it through a realtor. I don’t think they’re drastically going to
affect our business like people talk about it happening. Hey guys. It’s like you’re looking at a spider. Real quick. If you haven’t subscribed to the channel yet,
do that now because over the next few weeks I’ve got more amazing wisdom coming from these
legends that you’re not going to want to miss. Make sure that you click that notification
bell too so you get notified when the next video drops. Whitney, what are your thoughts on ibuyers,
and how has it impacting the way that you do business? That is an excellent question. Let me think about this for a second. Hmm. So there’s a lot of online companies that
are making offers and buying houses, and I don’t think they have anything to do with
my market, the way I buy houses, because I am really good at establishing a relationship
with my sellers and they like to know that they’re working with a person and not a machine. Okay. So the big guys are coming into the space,
the way they’re coming in, they’re going in on a large, large level and they’re not going
to get everybody. They’re going to put a big net out there but
there’s still going to be a lot of deals. So it’s important you diversify. You don’t just do the direct mail anymore. I send 70,000 pieces a month. I do ringless voicemail, I do text messages,
SMS. You got to beat them at their own game. You got to give better customer service when
you come in. And what you’re going to find, and I know
guys in the market competing with them, they’ll go head-to-head and they’ll still be able
to buy the deal for 10% less just because of the personal one-on-one touch. So they can come in, they can buy a lot of
houses, but if you’re good at what you do, you can beat them. When you think about these larger companies
buying properties through these, obviously they have a lot of capital backing them. I think if we can find a way to partner with
them, capitalize on them. If they’re purchasing all these properties
they know something that we probably don’t know, but if we can find a way to work with
them, network with them, and turn them into a buyer and find these properties for them,
I think it opens up a whole new world of investment opportunity for all of us. I mean, I think it’s just like anything else,
right? The market changes, you have to change. So we look at it as an excuse to just keep
getting better and better and better. Right. You can get complacent, stagnant. So they’re upping their game, that means you’re
going to have to up your game as well. Instagram? Social media, or something? I’d have to pull on that. I don’t know. All right, well this will make good video
right now. Take 2. Let me find my Instagram. All right. zack_childress. There it is. Take 9. So Zack, what are your thoughts? How are these ibuyers changing the way that
you do business? Well, that’s an excellent question. Honestly, it doesn’t affect me at all because
they’re not even in my state yet. So are they coming? Yes. You know I question the fact is it really
going to have legs? Because I was looking at some reports not
too long ago on Zillow and how much money they’ve lost running that model. So it’s like how long can it be a loss leader
for them before they actually start realizing that that’s not their model anymore. But hey, it’s like anything, you know, there’s
going to be times where it could be failing and they could figure it out and it could
succeed. But what it ultimately says to me as an investor,
and other people as an investor, is we can’t be relying on public seller leads. We have to really get into private seller
leads and dial in our marketing processes and systems. It’s not changing the way I do business at
all, because frankly, if you ever pick one of those companies to make you an offer you’ll
find out that it isn’t what it’s cracked up to be. In my world I buy houses on terms anyway. Seller takes a monthly payment until we pay
them off. I can pay them full price once we agree on
that, it doesn’t bother me one bit. That’s a great question. You know, we’ve seen of course the industry
is changing. One of the things of course is that it’s making
real estate agents redundant. So one of the things that we are doing is
we’re community based buyers. We connect with the community, as a result
we are getting deals that nobody else knows about. We’re connecting with the barber, the beauty
shop, the dry cleaner. Everybody in the neighborhood is bringing
us deals and that’s how we’re able to get deals that even Opendoor doesn’t know anything
about. Yeah, baby. My Instagram is themikehambright. You’re like The Mike Hambright? Yeah, I’m the actual-
I thought I was just talking to Mike Hambright? I’m the actual one. Yeah. Okay, got it. It’s definitely put a lot of pressure on the
industry and kind of forcing… You know, at the end of the day, the real
estate investing industry has benefited from a long time from the markets being inefficient
and it’s just getting more efficient. So I think it’s forcing people to get more
creative on how they do deals. So there’ll be a lot more kind of creative
ways to do deals going forward that you have to use to monetize, to offset all of your
advertising costs. If you’re picking up what these rock stars
are putting down, go ahead and click that like button. I mean, just smash that like button. Go ahead and share it with someone else that
you think may find that useful. Tom Krol? Yes. What are your thoughts on these ibuyers, and
what are you doing about it? They’re not in my market yet, but I know that
they’re coming. I believe in collaboration, not competition,
so I’ll probably find a way to work with those corporations when they do come. I think it’s a good thing. You know why? Number one, I like competition. In fact, I’m worried if there is no competition. There’s not a lot of people doing this because
if there’s a lot of competition it means I’m in a good market, it’s a good time to do deals. So I look at competition like that as potential
partners. What are some ways that I can work with these
guys? Maybe sell them some of my deals. In fact, I know somebody recently that is
buying a bunch of houses from the courthouse and then selling them to Redfin and Opendoor
and ZBuyer, Z Co or Zillow buyers and stuff like that. Right. Hello Freud. Yeah. Yeah. So I think there’s a lot of opportunity. You know, the constant in real estate is that
there’s always change. And so as a real estate investor, you’ve just
got to see how the world is moving. You got to see what technology, what opportunities
are coming into the space, and you’ve got to evolve with it. I don’t look at it as a bad thing. I look at that as an opportunity. What are they doing to open the market up? How do I participate in that? How do I take advantage of it? I see them as a buyer. I think they’re going to pave the way for
more institutional money to come in. And as a guy that can find deals, it’s my
opportunity to find those deals and sell it to them. Yeah. Okay. I find this question comes up a lot. I feel like I have a little bit of a unique
opinion on it. I don’t think that we should discredit them
as much as people like to. I’m one of the odd people in the space that
actually believe that the game is already over when it comes to them. They’re coming and there’s nothing you can
do about it aside from fighting them the only way that we can, which is with humanity. There’s always going to be the people that
want to deal with the brick and mortar store and you just have to… If you will add humanity to what you do and
actually care about people and go and meet with people belly to belly, find out what
their pain points are and solve their pain points, that’s the way that you compete with
ibuyers. Once they change the mindset of people, people
will buy and sell homes that way, but there will always be that segment of people who
want to actually meet with somebody and that’s where we fit in as real estate investors. That’s our niche. Well, here’s the reality. I’ve been doing this for 20 some years and
strategies, companies, different ways of doing things that’s an ongoing thing. And to tell you the truth I really don’t pay
attention to it too much. You know, there’s really, if you think about
it, in the last 20 years, there’s really been no so-called Opendoor that’s come into market
and stayed in the market. So from my end, absolutely no impact. We’re not changing how we’re doing things,
what we’re doing works, the basics work. They’ve always been working, and we’re sticking
with it. I think that those companies that are coming
into the market now are really making a difference in the marketplace in a lot of ways. They are driving prices. It’s definitely impacted me as a real estate
broker because of listings being sold so quickly to those types of companies. From a wholesaling perspective it’s changed
how we do business because our offers, and our numbers, have to be extremely tight. At the end when all is said and done, I think
a couple of things. Number one, it’s always a personal relationship,
and most investors don’t put enough emphasis on their ability to build rapport with sellers
and to establish those relationships with the sellers in order for them to be able to
have a chance of being able to get a deal over someone else. Secondly, I always think about there’s always
the perception of competition versus the actual competition. Because if you look at the stats, the total
number of properties purchased throughout the whole entire country, they’re buying just
a small segment of that. And if you really think about that, you really
don’t have competition from them. So what are your thoughts? I’m sure you’ve got some. Go ahead and share them with me in the comments
below. Then go ahead and share this video with those
that you know that are also concerned about these ibuying real estate disruptors. If you’d like to crush these ibuyers yourself,
what I did is I pulled this video right here aside for you, click it and take a look at
10 different ways of how you can find off market deals that these ibuyers will never
find. I’m Matt Theriault. God bless to your success. Bye for now.

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