Coming Your Way, December 21, is it Santa Claus? Not quite.
Opendoor, a company known for removing the real estate agent entirely from the transaction is having their initial public offering. Now I want to share with you what that means for you, and more importantly, the three fates of real estate agents that don’t continue to innovate both in how they get the customer and how they serve the customer. And then I’m gonna talk to you about a path forward to where you can always remain at the center of the transaction.
So yes, you’re familiar with open door, what you may not be familiar with, is that they posted $1.9 billion in revenue, the first six months of 2020. Now you and I both know that in 2020, there was not a lot of homes being bought and sold by open door because they actually turned off their entire home buying process there in the first few months of COVID. Yet they still continue to do a lot of business.
Now, you might be arguing that, well, they’re not making any money yet. Well just know that that was one set about Zillow as well. Zillow lost money for years and years, and just this past quarter, they posted a $40 million profit. So I think it behooves all of us to take a look at all of these tech giants to say, eventually, they’re probably going to be profitable, especially if they’re taking their case to Wall Street, and Wall Street is betting on them big time.
So what does that mean for us?
What does that mean for the real estate industry?
Should we look around and say the sky is falling? Or should we just find ways to innovate?
Well, you know, me, and the answer is always going to be the latter, that there’s always a place for those professionals who continue to innovate both in the way that they get the customer and in the way that they serve the customer.
But first and foremost, let’s talk about those three fates that I promised you, for those who do not innovate, right?
Number one, you run an unprofitable business that pays you mere wages, while you were out your health and your relationships. You know what I’m talking about. They’re certain years, where you spend so much time cultivating that big database, and you look back to see how much money they actually make. And then you look at your health. And then you look at relationships. And you say, Something’s got to give here.
Number two, you become a mere functionary and or even an employee of one of these large tech platforms. Now, you might be saying, I would never go to work for one of those guys. I would never go to work for one of my competitors, especially the big tech competitors. The reality is so many already have. You look at companies like Redfin, you even look at what Zillow is doing, where they’re creating their own brokerage. Sure, currently, people work as independent contractors. But over time, guess what he who has the gold makes the rules, that’s the golden rule. And if Zillow has all the clients and all the customers are going to them, guess what you will have to work for what Zillow says you will work for fate number three, you are forced out of your industry altogether. Now, you might say I love my industry, I’d never leave the real estate industry. Well, if things aren’t as you had once hoped they would become giving you more time and more income. The reality is, you may have to go do something else for a living. Now, you might be saying, Justin, I still don’t get to how this applies to me.
Let me share with you one example that may change your mind. Here in the Portland, Oregon market. Over the past 10 years, we’ve had the same broker who’s done more business than anybody else, anywhere between 100 to $150 million a year in volume. I checked the numbers not too long ago, and I realized that for the first time Opendoor is the new leader, they sold more volume than any other broker in the Oregon market. Now again, how does that apply directly to you? Well, it means that $138 million of volume now you can do the math on the commission was pulled out of the local real estate market and local economy. And that money went where? Well, it went back to Wall Street and the deep-pocketed investors that support Opendoor. So now am I positioning myself as the anti-tech guy, as the guy who’s going to try and fight these big tech platforms? No, and neither should you. You do need to be aware, however, of the threat, you need to be aware that these large companies with their massive amounts of revenue coming into their company, even though they’re not profitable, they’re taking a percentage of that money and investing it back into marketing and advertising in order to convince your future clients that they may not need you that they may be able to do a real estate transaction without you or without a real estate agent altogether.
So where do we go from here? Well, you are not going to be able to combat those large marketing and advertising budgets of those big tech platforms. You are going to have to figure out a way to be better and to be able to communicate better, more effectively to the niche market that you serve. And yes, I did say
You do need to get better, you are not going to be able to fool people, nor are you going to be able to compete with those massive marketing and advertising budgets, you’re simply going to have to offer better and more service to your clients. And you’re going to have to find them differently than you ever have before.
Why? Because these big tech platforms have gotten really good at identifying the customer long before anybody else knows that they’re a customer.
So how do you do that? How do you actually compete against these big tech platforms?
Well, you don’t compete directly with them, you have to rise above them, you have to play a different game that they’re not playing, you’re not going to be able to out tech, big tech, okay, but you are going to have to be tech proficient, we know that. But you’re also going to have to play a different game of value game, a game that they aren’t willing to play a game that they’re not going to be good at. your level of service has to be superior to what an algorithm can right? That’s obvious.
Secondly, you’ve got to get more creative and innovative in the ways that you get in front of potential clients. Is there opportunity for those of us in the real estate industry? Or is that opportunity dwindling more and more every day?
Well, it depends. It depends upon how well you are innovating, and preparing yourself to rise above industry disruption, again, both in how you serve the client, but also in how you get to the client.
I want to tell you about my new book called The Upstream Model: Hidden Secrets for Building a Massive Referral Business, While Crushing Big Tech Competitors.
Now you might be asking yourself, how do you crush big tech competitors? It’s in the book, you might be asking yourself, how do I build a massive referral business without wearing out my health and my relationships, it’s in the book and I feel like I’ve done something that’s pretty generous.
I’ve actually created a free plus shipping offering where you can get the book delivered to your house for only the cost of shipping and handling. I’m paying for the cost of the book. So I would encourage you to get your copy.
Now this will start the process for you to have the peace of mind, the knowledge the skills to be able to rise above industry disruption, and while many agents are suffering one of those three kinds of ugly fates, you don’t have to be one of them. You can create a very profitable niche and this great industry for years and years to come.
Be sure to get your copy the links down below.