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The real estate industry has entered an era of rapid digitalization over the past decade, with proptech platforms, fintech firms, tech-driven brokerage firms, and venture capitalists rapidly pushing towards a future. where buying and selling a home could be as easy as buying a new car. While that future terrifies most real estate professionals, Inman founder Brad Inman has said there are plenty of opportunities – if you’re open to it.
“[Millennial homebuyers] are working their way into a shutdown, and you want to be in that shot, ”Inman told the Inman Connect Las Vegas crowd at the Aria on Wednesday. “It’s your time. You are smart, you are opportunistic. You will see all the new technologies, [and] you’re not too scared of transactional stuff because you know what’s going on.
“Now is the time to strike a deal with your real estate destiny right now,” he added. “Make a deal with that. Make a commitment to do it.
Inman said consumers have reached the tipping point with technological innovation, as evidenced by Americans clamoring for the purchase of a Tesla or dreaming of the day when they can buy a ticket to space with Space X or Blue Origin. “This kind of booming innovation always happens,” he said. “But the question is, when will consumers adopt it? When is the tipping point when consumers say, “I need an electric car? “”
“It’s hard to imagine people like me wanting an electric car, but the point is, it’s a tip – the public wants them, and they buy them,” he added.
Inman said the real estate industry has reached a similar tipping point as venture capital-backed propetch and fintech platforms have used direct consumer marketing to twist the home buying or selling pipeline. – home buyers and sellers can initiate the transaction process before their first meeting with a real estate agent.
“[Digitization and innovation] also changes relationships, ”he said. “I’ll take you back to the 1980s in Oakland, California. Diane Rimer with Coldwell Banker was my real estate agent; an exceptional real estate agent, I used him for many years after that. Diane found the house and I said, “I need a loan,” and she said to call John McCarthy. He was the mortgage broker.
“So what was the secret? Diane organized the transaction and she represented me. She had the eyeballs, she had the consumer, ”he added. “But now look at Rocket [Mortgage]. I’m gonna end up going to Rocket, right, and what does Rocket Mortgage do? They say, ‘OK, you’re good to go. You are prequalified.
Inman said the subtle reversal of the real estate transaction process has put agents on their toes as high-tech and fintech companies backed by venture capital, such as Compass, Zillow, Opendoor, Side and Tomo, use billions of dollars of “cheap money” to drive growth plans, create innovative tools and platforms, and connect directly with consumers.
“What is a common denominator? Cheap money. With the money that is given to a guy like Elon Musk and a lot of entrepreneurs here – millions and billions of dollars to innovate with no expectation from these investors but in this one-on-one deal. They will get their money back, ”he said.
Most real estate brokers, Inman said, do not have access to the capital necessary to tackle industry disruptors and innovators who are digitizing the “micro-steps” of the real estate transaction process that create speed, efficiency and lower costs. costs to consumers.
“Now imagine if you are a real estate broker. You can’t get what I’m going to call here, almost free money, cheap money, ”he said. “You have to go to a banker, you have to have a guarantee and you have to pay it back. If you don’t pay it back. You’re going to take all that shit that you put as collateral, right? “
“We have cheap money. We have innovation. And in our world we have digitization, which is all becoming radical changes for the industry, ”he added. “I know some of you that give you the chills, and if you say, ‘I’m irrelevant if this is transactional’ then you’re missing the mark. It becomes transactional in a way that helps you every step of the way.
Instead of ignoring the changes underway, Inman said real estate professionals need to learn to use the tools and platforms available and move from a relationship-based value proposition to the value they offer as a representative.
“The bottom line is that relationships in the future may not be all there is to your quality work. You must now add a representation; and since representation is not defined for you, you have to define it, ”he said. “And you know what, it’s good. For the first time, real estate professionals can start to brag, they could start telling people what they provide and what services accompany them by representing their clients. You are all too humble.
“You are too humble to explain how hard you work and how you are there all the time,” he added. “Well, now you may have to [explain] because you may need to explain how representation works, what services you provide, and even how you get paid. We must therefore find [consumers], and you have to communicate with them.
Beyond the adjustments that individual real estate agents need to make, Inman said the industry has work to do at the macro level to make Multiple Listing Services (MLS) more efficient and resourceful for agents, and get rid of industry practices that disadvantage agents and consumers.
“The business model of cooperation with brokers has protected your relationships; it has secured you so that you can focus all of your resources on relationships, ”he said. “Now what’s happening is we’re changing that. The first thing that happened is you all decided that pocket ads and dual agency really was the best way to work.
“You thought, ‘It works great for me, it works for my client and it really is the solution. But you have started to empty your own life. You’ve started looking at the real estate world too often and probably too selfishly, and you’re starting to rationalize their decision to consider, ”he added. “You’re not a bad person, and by the way, you can disagree with me completely. This has started to erode the very safe and secure place for brokers to cooperate. “
Inman said the fracturing of the cooperative brokerage model led to a weakened MLS system. “These practices have diluted the value of MLS, not that MLS is perfect – it’s a bunch of fiefdoms wasting your money right now, but it’s a complete database of ads for your consumer. “
These issues, coupled with the battle between the National Association of Realtors, the Federal Trade Commission, and the Department of Justice, have created “a perfect storm” that will change how the real estate industry works and how everyday agents will be. able to manage the future.
“Instead of putting on your blinders and pretending it’s not happening and everything is going to be okay, be serious,” he said. “So instead of waiting for a decision, you have to save yourself. “
“Your peers and elders are wasting far too much time debating which seat they want on the rocket. They are sitting arguing, ”he added. “My challenge for you is: let’s work together. Let’s take a rocket seat, buckle up and take off. When there is transition and change, people are needed more than ever.
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