Metaverse & The Business Advantages of New Technology | The iBuyer Experiment - Stop & Chat #40

Is iBuying still a thing?

This week the team talks about the aftermath of Zillow leaving the iBuyer arena.

The discussion begins with a bit about the Metaverse … the FaceBook “World.” Our first thoughts were of EXP, and that Microsoft started their own “Metaverse.” Will EXP world be the “world” people want to be in? With EXP the world is a software they license, you have to wonder how much the value of the world is tied up in their valuation. They started using the virtual world software from Virbela and eventually bought it, and maybe they’ll license it out beyond real estate, who knows, it’ll be interesting to see.

What kinds of things are going to become the new norm, like Zoom has in the past year or so. A year and a half ago you couldn’t use it because no one on the other end could manage to either technically get it working or be comfortable talking to a screen. Will iBuyers be it, will every consumer think about asking for a cash offer rather than talk to a listing agent? If the market softens there are those who believe the iBuyers will do even better. Much of it boils down to people not having any patience.

iBuying will continue because there's a ton of friction in the home buying process and that is THE problem iBuyers solve. We’ll see iBuyig continue to be strong going forward, the markets aren’t going to come crashing down around them.

Let’s define some terms - there is power buying, bridge buying, iBuying, FINTECH, PROPTECH and others … all the different strategies that people use to buy and sell, these terms are thrown around with out many people know what they really are. They are just structured sales, financial instruments, like a mortgage that allow people to buy. They are all similar in that they are simply ways for someone to unlock their equity so they can identify and at some point in the process move into their new home.

Over time agents are going to lose market share to the companies that are providing these instruments that are not branded to the agent. They are “Zillowing” agents, they are convincing agents that bringing their clients into the system with them is the way to go, in the short term they may get more deals, but eventually they will begin to chip away at market share. When it comes time for the client to transact next, they think oh, we used Knock for the buy, so lets call them and get our agent moving, then the company just pushes the agent aside because they don’t work for them. All of these companies are data companies first, these companies, if they are not already, will eventually be direct to consumer and sooner or later that are gigot to ask themselves how can we become more profitable and return more money to our investors? The answer is simple … Cut out the agents.