Daily Dealio

60-Minutes Does Segment on iBuyers | The iBuyer Experiment - Stop & Chat #46

Welcome to the iBuyer Experiment...

60-minutes does a segment on iBuyers & the Zoodealio team breaks it down along with breaking down different situations and news real estate related.

Join Eliot, Keith, Kala & Jason on this newest episode of the iBuyer Experiment, the podcast that has the real estate industry talking!

Brought to you by "Zoodealio" where every agent is an iBuyer

Is Big Tech Coming for Your Commission? | The iBuyer Experiment - Stop & Chat #45

Welcome to The iBuyer Experiment...

Big headline alert... "Is Big Tech Coming for Your Commission?" Mike DelPrete, a leading researcher on iBuyers, breaks it down on his Inman article. Side note, in case you were wondering, he loves peaches.

Breaking down the landscape of the real estate market a bit, certainty and convenience, this is the number one thing sellers are looking for according to a survey Eliot brought to the table from the 1000 Watt report. Hiring agents that know the space and are educated on on the various options sellers have to work with.

As a realtor coming into the space it's important to use the financial instruments, such as Zoodealio, that are going to help you to better understand the market and help you and your sellers better understand the options that are out there.

Little bit off topic, but what's up with these gas prices! $85 to fill up a Ford Escape, sheesh!

If you don't know about the Cash Offer+, look into it you'll be glad you did. Sellers in distressed positions more and more are using the cash offer + as a solution to sell their home.

This episode got a surprise special guest, Doug Brinton, Zoodealio team member and real estate agent himself.

DEAL DEEP DIVE

Keith breaks down two properties where the home owner has gotten an OpenDoor offer and the agent is not tied to the deal. Interesting situation. These home owners came to Zoodealio where they got offers that beat them! Happy home owner, happy Zoodealio team!

And that wraps up this episode of the iBuyer Experiment, thanks for listening in!

Sean Moudry, Real Estate Coach | What Should Realtors Do To Increase Their Business?

This week we are talking with Sean Moudry. He has the #2 team in all of Keller Williams, and is a successful real estate coach out of Colorado.

What does the journey to becoming the #2 team at KW look like? I started with a how to buy real estate book at age 19 and began door knocking. At 21 I was licensed and sold 72 transactions my first year. By the time I was 27 I was closing 140-150 a year, on the 30 under 30 lists, in ReMax HOF at 24, things like that. From that experience I went to the brokerage side with KW and became a Bold coach and a franchisee. I eventually left and started my own coaching company and brokerage. Recently I joined the Sarah Reynolds Network. I realized that the expansion team networks are the future of real estate brokerages.

20 years ago it was easy to dominate a market, there were only a few places to advertise and it was easy to outspend people. Now you have Zillow, RedFin, Trulia, realtor.com and others, you really can’t out spend them. But by pooling resources and centralizing services the marketing spend can be increased in a market, In Colorado this year we will spend more than $1 million on marketing.

Zoodealio has some recently added mega teams and their marketing in the $100k a month range. Most agents are happy to make $100k a month, let alone spend that on marketing every month. It’s kinda like racing a jet when you are on a bicycle and the average income for agents has been dropping dramatically over the past 5 years.

In ’06-’08 money was easy and it drove the prices up, and rent rates. Now the fear is that some institutional buyers have access to massive amounts of cash worldwide. Let’s face it If you are in an unstable market the U.S. residential real estate market looks like a pretty safe bet, if we hit a recession will these institutional buyers simply dump their inventory? That is a scary thought.

Maybe they will hole enough of the inventory that they can control the cycle? Many plan to hold thee for 7-10 years as income based assets, the rents over time have only gone up about 12% while appreciation was much higher. Now the speculation is that rents will increase 15-20% in a lot of markets … Is rent control coming?

What should REALTORs be doing to increase their business? It’s not a one size fits all thing. Not everyone should be calling FSBOs or expired. I use the MBTI personality profile to identify what someone’s strengths are, then create a coaching profile and plan based on that then we back out from their strengths.

What do you see coming down the pike? We are averaging about 10-15 appointments a week and converting about 25% of those on the first visit and about 50% in 2 weeks or so. The reason Eliot and I reconnected is we were looking for a way to convert some of that other 50%. How do we do that, some of the properties are not ready for market for whatever reason, maybe it just needs some work, maybe its a hoarder house, whatever, or maybe the seller just wants an offer. The iBuyers are advertising to change the way sellers are thinking of selling their properties and promoting an “I want an offer and I don’t want to show it” mentality. We have about 200 properties from last year that didn’t sign with us. If we had a product that we could go to them with and say we have a real cash offer in hand for you, that is an important piece.

When the important menu of options for things like instant offers, home trade in, or make my offer cash - or other things on systems and platforms for agents and teams? A lot of mega teams are generating a lot of buyer leads, many of those are 18 months out and the price of generating those leads is going up. Some teams are too buyer focused, they are writing 20 or 30 offers and not getting them accepted. So if you want to pivot to the listing side you have to have a niche and offer something to catch the sellers attention, and agents don’t want to embellish so them having a product where they have real buyers ready right now is key. Your job is basically to bring the best technology available to your clients.

Broker Wars! | The iBuyer Experiment - Stop & Chat #44

Broker wars … kinda like Cola wars, but with houses

A lot is happening in the real estate world right now!

Keller Williams and EXP are fighting -“Broker Wars!” Apparently the ex-CEO of Keller Williams was recruited and hired by EXP and they are fighting in court about it. We’ll see how it goes. It looks like this is more about clout and who is stronger than about money. We’ll see who is stronger, but Gary Keller can box!

Inman had an article today posing the question “if the real estate market is so hot why aren’t prop tech companies and their stocks hot?” Stocks have been in the toilet across the board, but OfferPad is exceptionally low, I think they even went below $3 a share. They’re not even a billion dollar company any more, even with their huge line of credit.

We have been hearing rumors that OfferPad is now more interested in taking listings and recruiting agents than in taking down iBuyer deals. Open door is also recruiting agents and even has a program to offer agents $40 to show their listings.

DEAL OF THE WEEK!

Can’t really nail down just one! We’ve got a couple of deals going where a contract fell out and we were able to go in and save the deal with a Cash Plus offer, and the seller can still realize the upside of listing on the open market later. In short they get what they need!

77% of people polled by Redfin believe we are in a real estate bubble AND 44% of real estate agents also believe it. It doesn’t really look like a bubble, the supply is way below demand. It's not clear how supply could explode somehow if it popped, there just aren’t enough homes for it to happen. Back in the ’06-’07 timeframe inventory exploded because people were walking away from their second or third, or even fourth homes. Back then you had a Kroger Bakker with three or four homes with mortgages and it was easy to just walk away from them.

The real estate market is still BANANAS … that pretty much sums up this week’s episode.

Thanks for joining us.

Rick McHone, Real Estate YouTuber | Never Too Late to Start

The Zoodealio Team meets with Real Estate YouTube Rick McHone on this episode on The iBuyer Experiment Podcast.

Rick discusses his journey to becoming a YouTuber in the 'real estate' space. He says it all started when covid-19 hit. No one was buying homes so he decided to start making videos, having interest in cameras for some time, and make video's covering the different news and data changes in the industry keeping the real estate community up to date.

If your a real estate agent looking to market and get your name out there with YouTube, you're not going to want to miss this episode. Rick gives his tips & tricks in his success while reminding everyone that it is never too late to start something new.

Hope you all enjoy & Thank you Rick McHone!

How Realtors can be Successful in the New Year | The iBuyer Experiment - Stop & Chat #43

This week we’ll talk about some thoughts on 2022

HAPPY ZOO YEAR!

CoreLogic released their top markets in 2021 report and Phoenix was the #1 real estate market in the United States. Over 30% appreciation for 2021, its amazing. Arizona is such a fabulous place it is easy to see why our population is growing.

Zillow also released their prediction for the ten hottest housing markets for 2022 … Tampa, FL is #1. Followed by Jacksonville, FL; Raleigh, NC; San Antonio; Charlotte, NC; Nashville, TN; Atlanta; Phoenix; Orlando, FL; and Austin, TX. Zillow uses the traffic numbers and other analytics and data to make these predictions. In the same report they also advise to say no to green cabinets, houses with green cabinets sell for less.

The buy and hold/rental market is interesting too, rents appreciated at a rate of about 10% in 2021 and they are expected to have a similar increase this year. We will have a lot of appreciation across the board this year, agents should point out to buyers on the fence that renting is a bad idea and that the appreciation in the housing market is going to continue.

People often consider all of the iBuyers to be the direct to consumer companies, things like Redfin, Open-Door and the like, but the reality is that huge hedge funds and REITS (Real Estate Investment Trusts) own as much as 12% market share in real estate where they want to invest. They are not flipping these homes, they are buying them and holding them to as much as 7-10 years as investments.

The new trend of "build for rent" are growing in many areas, but especially where iBuyers are already prevalent. These are single family homes, not multi-family or apartment buildings, that are not being sold to consumers, this can add to an area's supply chain and trades shortages. American Homes For Rent started an arm years ago to buy existing homes and have since shut that down to build these communities.

Home ownership is decreasing as well, in Q3 2021 the ownership rate nationwide was 65%. We REALTORS should promote home ownership wherever and however we can.

Which brings us to the big questions … How are REALTORS going to be effective in 2022? How will they get more listing inventory, how can they have a cutting edge value proposition? You can’t expect to have a large inventory by working just one lead source, if you are after truly big things you have to have a wide variety of lead sources to fill your sales funnel. Build a system and process … do the work, and it works. Find out who it is in your marketplace that are driving things and align yourself with them. It boils down to real estate conversations. How many are you having, and when can you have a unique conversation that no one else is having, if so you are definitely going to elevate your position in the market.

The Zillow iBuyer report came out and Phoenix was reported to have 12% of the market bought, owned or sold by iBuyers. In Gilbert, AZ (a city of about 250,000 people) in the last week of 2021 there were 172 active listings and 87 of those were owned by Opendoor, OfferPad or Zillow, that is more than 50% of the active market owned by an iBuyer, this has definitely grown dramatically. This is coming everywhere, Gilbert is extremely educated, has an extremely high average household income, and very high housing prices, if it is happening here, it can happen anywhere.

BOLD Real Estate Predictions for 2022 | The iBuyer Experiment - Stop & Chat #42

The iBuyer Experiment

Stop & Chat #42

Eliot, Keith, Kala and Jason break down their top BOLD predictions for the real estate industry coming 2022. There's a lot of potential big moves that could come into play this next coming year, listen in as the Zoodealio team breaks them down.

Top 5 Stories The Defined Real Estate in 2021 | The iBuyer Experiment - Stop & Chat #41

Stories that Defined Real Estate in 2021

This week the group will discuss the top stories of 2021 in the real estate industry.

First, Zillow acquired Showingtime for $500,000,000. The industry exploded .. It was like stepping on an anthill. But really if you look at it, they actually got a good deal on that data. They are able to see how many houses are opened on a daily basis in real-time. And this gave them a seamless “agentless” showing system, which helped live offers work.

The next big story is “Zillow Fail” Zillow quit iBuying, they didn’t necessarily fail, but they struggled with how to flip a property with the actual boots on the ground. Zillow severely underestimated the complexity of the real estate transaction and what it takes for that transaction to take place. Zillow will likely be an aggregator for iBuying and poor buying. 60% of their plan worked, they will be back.

The institutionalization of America … The reason Zillow was able to unload 7,000 or so of the homes they had purchased is because of the institutional buyers. A couple of weeks ago Mike with Altos Research shared with us that quarterly about 10% of homes sold are to an institutional buyer. That means that a fairly large percentage of our housing stock is being turned into long term single family rentals, and more of these types of buyers and transactions are coming.

Let’s touch on the insane market conditions next. We’ll define a “normal” market as something like one million homes available on the market on any given day and about six million homes sold nationally per year. The total unit count is going to be crushed. Here in the Phoenix metro even with really low inventory day to day the annual units sold is up. Nationally this year we are going to surpass 6.5 million homes sold, and that number has been trending up year-over-year. At the beginning of 2021 the average rate published by FreddyMac was 2.65%, and for one didn’t expect rates to still be as good as they are at the end of the year, but we are still at 3.12%. These are still historic low rates and that is helping feed the market. REALTORS have had to change and up their game, do things like we are doing to address the fast changing market.

Finally the biggest story, which isn’t getting the attention it should be. DOJ withdraws from the settlement agreement with NAR in July. The U.S, Department of Justice and the National Association of REALTORS came to an agreement because there were potential antitrust practices form NAR and it’s members that were deemed to be anti-competitive and were affecting buyers and sellers. DOJ felt that the settlement would prevent them from making future claims. This tells us that the DOJ is going to continue to investigate NAR and that affects all of us.

It’s been a wild year and 2022 is likely to be more of the same.

Craig Proctor, Real Estate Agent Coach | Getting The Motivation to Succeed

This week I’m joined by Craig Proctor, he created the “your home sold, guaranteed” program, one of the precursors to the current iBuyers.

 

In year three of his real estate career he was one of the first REALTORS to offer an upfront written guarantee to the seller. That moment he says he completely separated his unique selling proposition from all of the other REALTORS as was named the #1 ReMAX agent in the world that year. It basically worked like this, if they bought any of his listings he would guarantee the sale of their house. Today we know this is something sellers want.

 

A lot of real estate agents when they hear about guaranteed sales or iBuyers have a negative perception of these. We have to understand the reason they exist is because this is what sellers want! Usually when agents don’t like it they say something like it's a bait and switch, or you  give the seller a really low offer, they just don’t understand how it works. With the guaranteed sale program we are not offering 100% of what the house would market for, but we are offering an aggressive number because we want the seller to take it and buy Ione of our listings. 

 

“The only vote that counts is the customer.”

 

A lot of agents did not like the program, I really did create an unfair advantage for myself, buyers and sellers loved it and other agents didn’t understand it.

 

“To be successful real estate agents need three things - Systems, Intellectual property and technology.” 

 

Most agents think of a real estate coach as someone who will hold them accountable, or maybe share some ideas, or maybe a motivator. What we do is very different, it is a systematic way we teach  agents - A lead generation system, a conversion system, a presentation system, a recruiting and training system … Every part of growing a large real estate team. We leverage the agent in three different ways, we fix their lead generation system. Then interdict technology to increase capacity. Then we teach them how to hire the right people. Eventually the real estate business starts to run itself, that is when you have a business and not a job.

 

Everything you want to do in real estate has already been done by thousands of people. If I wanted to learn to play golf, I'd find a good golfer to teach me. The problem in the real estate industry is a lot of coaches and trainers have never held a real estate license … and big names too! They have never had a buyer in their Carr, never negotiated an offer. Because I was a successful agent for 20 years I probably understand agents better, because eI was in the trenches for so long. It’s hard for a coach or a Guru to understand the life of a REALTOR if they have never been a REALTOR.

 

In the beginning I knew nothing about marketing, I wasted thousands of dollars on advertising that did nothing. Then I attended this conference and learned about direct response marketing, and that the only reason you should spend even one dollar on marketing or advertising is if it is trackable, and you can test it and show a return on your investment. I took some of these concepts, they asked what sets you apart from the other agents, I didn’t know! I talked to my dad(he’d been in real estate for years) and asked what would be the boldest offer I could make to a seller? His answer was If I don’t sell your house, I’ll buy it. I started advertising “Other agents will promise to sell your house, Craig Proctor will guarantee it, in writing.” I think in my career of order 25 years I’ve only ended up buying two houses.

 

In real estate the pricing algorithms are getting better. We used to have travel agents and stock brokers … Now my 82 year old dad doesn’t use a stock broker and he outperformed my broker last year. What is happening in real estate is technology is getting a better handle on what houses are worth. This is going to be a bigger thing, people want convenience. Social media, the way we deliver our message, the way we retarget, the omnipresence - It’s just an exciting time to be a marketer.

 

“In order to make a quantum leap in your business, you first must make a quantum leap in your thinking.”

 

When REALTORS come to me they typically say Craig I want to do better, but I don’t want to change what I’m doing. I tell everyone on day one, you didn’t come to me to learn how to do what you do now a little bit better, you came to me because you want to learn radically different ways to get exponentially better results. For that to happen we undo what they have learned to do and we’ve got to start all over again because how we think controls what we do, and what we do controls the outcome. If you think the wrong way you’ll never do the things I teach and you’re never going to get these results. You may be very good at what you know, but  getting better at what you know will only give you incremental gains. To get exponential gains you have to learn what you don’t know, so be curious and don’t immediately judge a concept or an idea. We want to know what is going to be big and to be ahead  the curve on it.

 

If this resonates with you, set up a free call with me and my team, go to proctorcall.com. this is not a big sales pitch, I’ll ask you some questions about your business now and about your vision for the future of your business. If after that 45 minute conversation you want to work with us, great! If not you’ll be on your merry way and keep doing what works for you.

Mike Simonsen CEO of Altos Research | Inventory Predictions for the Upcoming Year

This week we talk with Mike Simonsen of Altos Research

There are a lot of misconceptions about the real estate market, Mike will help us sort it out a bit.

The Real Estate Market

The market has been on fire, it’s been a big year for home prices, but the real story for this year, and last, is the lack of available inventory. There are 350,000 single family homes on the market nationwide. Not long ago, like 5 years ago, there should have been a million homes on the market this time of year. This is a trend that has been falling over the past decade, but really dropped off at the beginning of the pandemic and has continued into this year. Both the supply side and the demand side are accelerated so anything that does come on the market is gobbled up quickly.

We have rates super low, locking in forever - 30 year mortgage rates. As a result if you find a house it’s going to be affordable forever, this drives a ton of demand. A small change in the interest rate makes a big change in monthly payment. So affordability is really impacted by mortgage rates, much more than it is in a change to the price of the house itself. At the beginning of the pandemic rates bottomed out and even with 10% price appreciation the affordability was up.

Looking forward to 2022, if rates stay the same and prices continue to increase we lose some affordability, if rates rise then we lose affordability, and we are likely to see a little bit of inventory build because demand weakens at some point. If rates fall, then what happens … ?

Seasonal Inventory

Inventory is definitely seasonal, peaking in late June and typically the 2nd week of January is the lowest inventory, it’s a very smooth cycle. What happened last year is people kept buying through the holidays so inventory never really peaked in 2020 and it just kept falling. This year the low point came in April and a little inventory climb in the summer, and now buyers are accelerating again. It looks like new record lows to start 2022 and really no sign of new inventory increasing.

Hidden Inventory?

With low rates it’s affordable to hold on to your house when you buy a new one, so now you have two houses at 3% … Now you have an investment property. This has taken 8 million houses off the market and turned them into investment properties, we lose about 10% of the inventory every year to investors. Most of these are individuals, something like 90% are owned by someone who owns one to four investment properties, so no sign of these flooding the market.

We had a mortgage forbearance process with some seven million people opting into the program at the start of the pandemic. At the time we wondered if people would have to sell or be foreclosed on. With the big increases in price everyone has equity and even if you can’t make your payment again you can sell and take your cash. As it turns out, almost all of the people in the programs have figured out a way to make their payments and keep their house, so none of these are going to increase inventory either.

Where Are The Bargains

If you are an investor waiting for bargains to come along, they are not coming. There aren’t going to be mass short sales because no one is short. For them to have a foreclosure you need to be in a bad mortgage situation, like a permanent loss of employment; and not be able to sell your house. People have equity, they have ultra low rates and homes are selling fast, so there is no foreclosure inventory coming. It’s a really good time to own right now.

Prediction for 2022

Number one - record low supply, number two - there will be fewer price reductions and demand will increase along with price. Tight supply and strong demand will continue through the first two quarters.