How Real Estate Agents Compete and Win Against iBuyers
In today's post, we discuss all the ways to approach the topic of iBuyers with your seller clients.
Below you can either listen to the podcast or watch the full video.
Here is the podcast:
We talk about the increasing number of people using iBuyers as of 2019 compared to 2018.
We discuss how building strong relationships and providing custom supports and value for your clients is more important today than it's ever been.
We also talk about the future of iBuyers and real estate in general. What are some things that will affect the iBuyer market and our business as real estate professionals?
Finally, we talk about how to embrace iBuyers into the strategy of helping you to sell their home for more money and solidify their decision to list vs. take the easy way out of a cash offer
Here is the full video:
Kyle Handy 0:00
Perfect. We are live on Facebook. Well guys, welcome to the call. So excited to have everybody here today. Let me see. Who do we get on the call now? Oh perfect. Alright. Welcome Tonya Tammy. Good to have you. Thanks for joining guys. Alright, so the topic of today's call, as you may have seen from Facebook, I did just a quick live stream a few minutes ago is that we're going to be talking today all about I buyers. You know, I thought it was kind of interesting. I had a call last week with an agent who you know said that you know, more and more he's starting to see his business kind of get, you know that into the discussion, right like not necessarily that his business is crumbling, but you know, more and more he's, he's lost a couple of deals to I buyers. And you know, what can he do about it? And it got me kind of looking in kind of researching, are they really you know, I buyers are they a significant portion of the market. And, you know, do we need to be aware of all this that's kind of going on. And so, and when I did the research, it was actually pretty eye opening guys. And I want to share kind of what I found with you guys today. So just, you know, we'll start there with just kind of seeing, at least in my market, San Antonio. And I would imagine most of the markets that I buyers exist in are going to be similar. I want to show at least the reach of what I buyers are doing. So you can be aware, and then we'll kind of talk about, you know, what we can do about it, right, like as real estate agents, how do we compete? Should we compete, you know, like, I mean, there's some people that you know, if the, if it's in the best interest of the client to work with an AI buyer, like, Hey, you know, should we stop them? Should we try and figure out how to utilize them to everybody's benefit, and all of that. So anyways, that's what we're going to start by doing today. One of the ways that I want to start is I'm going to share my screen here with you guys. And let's see pull this up here because I want to show you the things that I saw and I thought this was kind of eye opening just to give you guys an idea of the reach of these buyers and hopefully it'll work my MLS was kind of being a little squirrely the other day but let's see go search single residential. Hopefully it'll pull up now see it's still good. Go to the modern search and see if that's working here.
Kyle Handy 2:33
All right. course right technical difficulties. Here we go. That works now let's go back. Classic. Still not working? Okay. Well guys, what basically I did here let me try it again. One last time here on this will do try and do it on the modern search is if we look in here, we should be able to pull this up. So we got single residential and let's go To All right, we're going to try and find the type of properties so the listing office name, we don't need to know that the owner what I did is just looked at open door. Okay, so we look at open door as an example in this market in San Antonio, they're here in San Antonio. We are going to open type single family will leave it all open, single residential. Alright, so there's 139 right now what I want to try and find on guys, y'all are going to bear with me on this because I don't usually use the Here we go. I don't usually use the modern search, I use my more traditional search the old one is what I'm used to the classic Let me try actually opening up another window and see if I can get that work and it's kind of hit or miss. I think our MLS is having some issues right now. But if I go here, there we go. Perfect. Alright, so what we're going to do is open door and we are going to look at just the sold homes. Right? We'll pull up the closing date.
Unknown Speaker 4:16
Kyle Handy 4:18
Beginning last year so January 2018, January one through December 31 2018 so it's all last year open doors the owner sold listings right got open this up to all the business filter that out. We can look it up and see 113 listings from open door were sold last year, right? Hundred and 13 years all of them at least in San Antonio. See the price range goes anywhere from 122 at the low end to on the high end 385,000 so that's kind of open doors range. So of course, you know, open door doesn't go in all ranges. And when I say open door, I'm just kind of, you know, using them as an example for all i buyers, each our buyers a little bit different, you know, obviously, their, their business models are different, but let's just use open door because they're kind of the biggest one I would say right now. But as far as that goes, What I really want you to see was 113 listings last year, sold by open door. Well, let's pull just this year up, because I think this is going to be interesting. You pull up this year sold listings by open door and granted we're only halfway through the year guys. But if you look at that 554 opened our listings sold this year, so I mean five times the amount in half the time so I mean they are gaining market share. They're growing pretty significantly. And if you want to just like look at that, what that looks like and let me pull that Something up here and feel free to put things in the chat guys as we're talking about it if these numbers are eye opening for you know, let me know what you think here, but we had 113 verses so far this year we're at 554 but now what's really interesting, right? If we look at how many houses all together have been sold, so we put back in here 2018 2018 for open door, we take that out out of 32,212 last year, all all all year 32,212 listings, and then this year, all listing sold 18,135 so far this year 18,001 35 135. Okay, so if we can do a percentage on that right that by by that
Kyle Handy 6:57
3% bring that up. We're point 3% so I mean that's a significant percentage difference right? So you know from last year this is 2018 and then this is 2019 year to date. That's a pretty pretty eye opening deal there. I know when I first saw that, you know, last week I was like, Oh my gosh, that's pretty crazy. That's what actually kind of started me down this whole path of kind of like looking this you know, looking this up more and so thanks, Teresa. Appreciate that. So guys, and we are streaming on Facebook too. So if you got you know if you're watching on Facebook and you've got some something you want to add or questions you've got, you know, put it in the chat there. If you're on zoom, again, feel free to you know, of course, put yourself in the chat box on zoom. I'm monitoring all this So, but yeah, pretty eye opening numbers there. And that's where I wanted to start just so you can see that this is a discussion that needs to be kind of talked about. And you know, if you know we need to be more aware or what we can be As real estate agents and even you know clients out there you know if you're watching this you know is it something that you know you guys should be you know investigating more yourselves obviously they're gaining traction you know they must be gaining traction for a reason but let's kind of kind of dissect that and see you know what needs to be you know talked about or discussed and so I'm going to stop sharing that now. And what's going on Tim? Good morning. And so alright guys so so that those are the numbers right so now we at least know where we are starting from with I buyers and kind of at least on the open door side of it and you know, and I'm sure all the other different ones offer pad. You got perch, you got the Zillow which is opening up their own kind of I buyer system and even the brokerages you know some of the bigger brokerages are starting to do their own I buy our programs I know like Keller Williams is XP realty is working on it. And so I think I don't know if REMAX is or not if we got REMAX agents Feel free to, you know, chime in if, if that's something that REMAX is doing or not. But But I think that, you know, the end of the day, I don't, I don't think that I buyers are going to be any less, I think that there is definitely a percentage of the market that will like the idea and the model behind I buyers, I think, you know, as a society, you know, a lot of the reason why we're going towards our buyers is people just want simple, they're willing to take a little bit less on their homes. And, you know, for the ease of not having to show it for getting an instant offer. Maybe they find you know, people are kind of impatient, I would say at this point, they find a house they like, you know, they don't want to be contingent. So you just take that offer because you know the deals too good to pass up on the new one, or they just emotionally get invested on that new one. And they want to move forward on it right? They don't want to have to take the time to list their home and all that kind of stuff. So that's typically what I've seen. You know as to why most people are using it. It's mostly just convenience. It's taking technology as well. So I mean, you know, basically being able to just log into a computer system, you know, get an offer, you know, you know, from the convenience of your home, not having to worry about having a real estate agent come out to your house and do all this kind of stuff. I think some of that is is nice, you can just get an email and then boom, you know, within 24 hours, you got an offer on your house, people like that idea. And that's the way that you know, society is kind of trending towards. And so, you know, that's, I think, why I buyers are taking up so much percentage of the market. Now, that being said, let's talk about kind of the other side of the coin. And part of the reason why I think sellers are willing to do that is because right now the markets been so good for so long, you know, ever since it kind of crashed back, you know, 10 years ago, that people got equity in their homes, you know, they have you know, money to kind of burn I would say in a little bit to where if they're not going to maximize their true value by selling their home. With a realtor
Kyle Handy 11:02
You know, they're okay with that, right they can lose an extra 357 percent right? And you know and still be okay with it because of the convenience because of maybe whatever that situation may be. And that's kind of it and so I think that you know, one of the things that we may see change is when the market does kind of take a turn and so you know, when the market does go down, which inevitably, it will cool off a little bit it'll slow down a little bit. There's some people that already say that that's that's happening or it's coming in the next year to two years. If that starts to happen, and you know the equity in people's homes starts to go back down the other way then we can you know, possibly see people trying to sell their homes for more you know, or squeeze every little ounce out of that that home sale as possible. So that's one thing that's one camp that people talk about is right now it's easy for I buyers to exist. You know, it's the same thing as like a home Flipboard Right, right now everybody's getting into flipping homes, because the money you know, there's a lot of opportunity there, right? Like, you know, the home prices have just went up and up and up, people can go in make offers to people, even if they're, you know, low, so to speak, it's still gonna be higher than what they've got an equity. So most people are willing to sell at those prices. And so, you know, so that opportunity exists a lot. But now when the market goes down, and you know, there's not as much margin there, you know, sellers going to need to hold on to every little piece. And so now let's kind of that's the whole logic behind it. But now let's kind of get into some of the details and what can be done about it. You know, and again, I'm not I don't know the specifics, like down to the detail about every single different I buyer program. I know how in general most of them work. And of course, if there's people on this call that you know, have first hand knowledge with it, or maybe have been in a situation where, you know, a client of theirs is gone through the process. We would love to hear from you. I'm sure that that could be a huge help to those watching. watching this video, so feel free to chime in either, you know, raise your hand if you're on on zoom, and I can call on you or put it in the chat. Or if you're on Facebook, you know, feel free to type in questions or your commentary there. And we can go over it. But as far as you know what it is like, I actually just had a client look through perch the other day, and you know, we've got their home listed at like $290,000. And their market value is probably pretty close to that quite honestly, they've done a lot of stuff to the home, it's probably right in the 280s. Low to 80s would be my opinion of where that house should sell for.
Kyle Handy 13:36
We've got it listed at 289 nine and pretty competitive. We started a little higher than that but we just now recently lowered we also did some painting and the houses really nice looking. Well they just got their perch offer for $252,000 it and so I went back to them I said Look, I mean you know you definitely you know could take that but in all honesty if you were really willing to take that I would advise you to hate you know, we can drop your price. To 75 to 70, and probably still get, you know higher than what they're going to give you. And the way that purchase working is they were still going to charge a 3% buyers fee on top of that to 52. So the 252 wasn't the net number. So it's like, hey, if you could sell it for two at with 6%, you know, you're still well better, you know, way better off than 252 with 3% off. And so that was the purchase scenario. One of the cool things that I want to pull up, it's an article here, I'm going to share this with you guys. I think, you know, the whole whole idea. And actually, I want to get into kind of before I get into this article, I'm going to give you my ideas of how you can work with sellers to make sure that you're not just you know, as a realtor, you want to have their best interest at heart. And if that means using a buyer, I think that you should, you know, advise them to do that. But I think that you know, they need to be aware and so what I'm going to tell you what this article, I think that this article is something that in fact, you can use as Part of giving them the best level of service. Before we get into that I've got four things that I think that you as a real estate agent need to do to make sure that you're competitive with buyers, with all buyers, right? So the first thing that I can tell you is that you've got to focus on relationships. That is the one thing that I buyers will never be able to do that you as a real estate agent can do. You know better than anything right? And and if you haven't been doing this already at a high level, you've got to it's going to get more and more important that you differentiate yourself as a real estate agent by the amount of service that you give to them. Right so like that's more than just you know, calling them once in a while or texting them or checking in on them. This is I mean setting up a birthday program we've talked about that before. You know setting up a whole anniversary program giving them value right sending them comps for their helps on a monthly or quarterly basis. You know, invited them to events of yours where they can network and meet people and see your face, taking them to lunch taking them to, you know, drinks or coffee or anything that's going to set you apart. That stuff, it goes miles, I'll tell you, I mean, yes, at the end of the day, if they can somehow get a better deal with an IBO numbers do speak a lot. And people you know, they there, they want the most amount of money they can get. But at the same point, if you've built that relationship with them, they're going to give you the benefit of the doubt right there least going to give you the opportunity to talk to them to kind of keep them as a client and to win their business. If you don't even start there with the relationship, then chances are you won't even know that they're looking to sell and they'll just go with a platform you never have the opportunity. So again, better service I put more personalized care stronger one on one relationships, right. So that's the number one thing that I think that needs to be said as a real estate professional that you've got to do to make sure that you keep your business for Going to something like an IBO our platform number two, and this is where again, this is all actually part of giving good service is I think you need to educate and share the whole picture with them. Right? Like if you know if they're even considering it or not, I think you know, it's good to have the discussion about I buyers so you're not blindsided, you know, one day and they're like, oh, like, you know, we actually just decided we're going to cancel the listing agreement, or we're going to take an offer from whatever, right, like you that you don't want that discussion ever. I think you want to educate people, you know about the process and what I buyers mean. And by doing that, what you can do is, of course, start with third party material, right third party validation. So it's not just you saying it, it's, you know, somebody else saying it and then you kind of, you know, giving your take on it. And so one of the things that I like to do is I've got this article here, and it's called, selling your home to an i buyer could cost you thousands, right and it's from Market Watch, which is not Like a real estate agent website right? This isn't like some realtor just trying to tell you that I buyers are not good you know just so they can get your business. This is truly a third party. You know, they do mostly investments and financial advice. This website Market Watch and they basically go over all of the details of I buyers and I'm going to share this article because we're going to kind of dissect it and talk a little bit about it here.
Kyle Handy 18:28
just lost a listing to Zillow direct sorry to hear that end Yeah. I think this is be eye opening for a little bit of people here. So here's the article right? selling your home tonight buyer could cost you thousands. Here's why. Right? And they actually go over some scenarios. Some examples of an actual like home sale through they talked you know, they talked about knock in here. They talked about Zillow. So here you go. Right so they take actual sold prices of homes and they got three different markets here, Atlanta, Charlotte, Raleigh Durham, and they show you know what the actual sold price of the house was. Right? Open Doors offer. They show offer pads offer. And then they show the net offer because here's the thing that I think you know, with education is important. And most of the time the clients are smart. And if they do go through the process themselves, they'll see the pitfalls themselves. But if but if you aren't there to kind of guide them and coach them, you know, they might not right, like and so like the thing you have to realize that with open door, there's a fee, a listing fee, because they always say, Oh, well, you can save the, you know, 6% or whatever, from you know, the real estate commissions. And while that might be true, they still have fees that go on top of their offer. Right. And I've heard anywhere from 11%. I think this offer this talks about it being about 7%. It kind of ranges, and I think it also has to do with the price of the house, but there's still going to be a fee on that. So if you look at the Here you know the the net offer an open door offer on this particular home was $238,000 to the seller, right? That's after their offer minus their fee and that's what it was with open door with offer padded is even lower the actual customer net open market of course that's what the realtor is 6% taken out if they sold it at what the house actually sold for $293,000 was 271,000 that is a significant number guys. I mean that's a huge, huge difference. And I guess offer pad not in rally dirhams. That's why they don't have that number listed here. But when you send somebody something like this, even just you know, just a saying hey, you know, take a look at this. This is just what you can expect. Yes, it is convenient, right? But you're going to pay for that convenience. And is a 12% difference worth it right in your opinion. And you just have to have that open conversation with them and let them know. It comes at a cost guys You're paying for convenience at a cost. And if that person, you know, when you've explained this to them is willing to do that, then hey, then that's probably what they need to do, right? You shouldn't, you know, as a realtor, you've got a fiduciary duty to make sure that, you know, the client's needs are most you know, are met, and whatever state that, you know, that means and so, if that's, they're aware that they're likely going to earn less net at the end of it all, but they're doing it because of convenience, and that's more important to them than Hey, you know, then don't worry about it, you know, maybe you lose the listing, but if they're looking to buy, well, now you can help them on the buy side faster, right? Like, I think you just have to look at it, like, you know, what's best in it for the client. And once you've had these conversations, or like, once you've directed them to go get the full picture, you know, I think that's kind of where you go with that. But anyways, you know, other ones too. So here's, yeah, it goes more into like the customer experience. Right. Here's, you know, talking about, again, the different knock offer pad open doors, and the actual offer price. So you can see there the fee here 11.5%. Huge, right? So it ranges anywhere from six to 11%. So I think that's the one thing that clients might not know, right off the bat, they think that, Oh, I'm getting an offer, this is my net offer. No, you got to read a little bit further into those offers, and realize that there is still like a fee going in there. Now, most people say there, they are happy right with the process, and why wouldn't they be? It's very easy. You know, it's it's simple for them to do it in their own home. Usually, it's a very quick and easy process, they can close quickly. So of course, the experience, I would say is a good one. I in fact, actually did a offer open door offer on my house here just to see the process. Actually, my house didn't qualify for it. I think that you know, they they try and focus on homes that are kind of more towards the average, right so 225,000 is the average price in San Antonio. They're going to go a little bit less than that a little bit higher than that you can see, you know, when we did our our MLS search, the lowest one that they sold was 122. And then the highest was 375. But the majority of them were right between about 175 to, you know, to 50. So just so you can you know that that's what offer open doors doing. But anyway, so you can kind of see how that's working out. I would advise people you know, there's a good video, there's some videos that you can pull up on YouTube. Actually, my buddy Tim Macy, I don't know if you're watching this or not if you're watching the replay. He did a good one. Actually. I was impressed by it. It's on YouTube, if you just put Should I sell my home to offer or open door
Kyle Handy 23:43
you know, it'll pull up I think it's one of the first ones and he kind of goes you know, both sides of the coin. It's good one for the sellers to look into watch because he explains it and you know the different percentages and how the actual process works. It's good to educate clients on that. So anyways, Send them videos, send them articles, talk to them about it. Right, like have a discussion, find out what truly is important for that client and go from there. I had one like this, you know, probably about five, six months ago. And it was a person trying to sell a property for their father, who you know was going into, like elderly care. And they just wanted something easy, right? They didn't have to want to worry about him. Worry about the process of selling the house and what I explained in this case, and it ended up working out perfectly. I said, Hey, give me six weeks, right to list the house, put it up for sale, six weeks, if we don't get what's fully available to that person, you know, what I think we can get for them, then hey, go take you know, to go take the offer, you know, from open door, right? Like, you know, it's not going to be you know, this long, six month process. I wrote a listing agreement for six weeks, and that's what it was right? I said, Hey, if I don't sell it, you don't have to pay me for pictures. You don't have to pay me for, you know, anything, there's no expense out of your pocket unless I sell this house and give me six weeks and if I sell it then great if I don't, then you can go take that offer happily, knowing that you've at least tried both, you know, tried tried to get the most amount amount out of that house. And and I think that honestly, that's what got the person, right. That's what got that seller to work with me. Because in that case, like she didn't want to do her father, a disservice. Right? And just be, you know, taken offer because it was the easy way out or feel like she was being lazy, and just, you know, not exploring all opportunities. So that's why she gave me first of all the time of day to even talk with me in the listing appointment, but then want to explain that scenario of Hey, let's just try it out. Like, you know, give me give me six weeks. Now obviously, this was a vacant property so that wasn't really a concern there. The timeframe was a concern. They didn't want something a drag drag on a whole long time, but six weeks I think most people can you know, usually excited Six weeks. And we all know as real estate agents in this hot market, if we list a house and it's not sold in six weeks like you probably have listed it a little bit too high right for maybe the condition that that properties and because there are buyers out there all over the place, and usually when a house isn't selling it's not because of marketing or anything like that. People can find houses all day long. It's usually price right? And so I just told them if their houses and sold in six weeks like we're probably not priced right anyways, so hey, maybe that you know gap that 5% or that 10% gap between what we think we can sell your house for and what that offer you got, start to narrow well then go do that right that might be in your best interest. Well, we ended up listing it and sold it for actually it's funny, we put it on. We got multiple offers sold it in the first weekend. And we listed I think it was like at 112,000. We sold it for $121,000. So we sold it for more making that gap even bigger. So of course by the end of that process, the seller was extremely happy that we ended up settling You know, going through the whole process, I think their original open door offer was in the 80s. So it wasn't even an open door, it was just us open door for a buyer. It was a different, you know, buying houses kind of program, right? They were going to give them 80,000 bucks. So in that scenario, I think that was a great way of kind of handling it. It worked out, of course, but I think, you know, just having the discussion about it and not being afraid, and so worried that like, I've got to get this listing and making it kind of come from desperation, but just like really kind of coming to value and saying, Look, I'm going to really do everything I can to get you the most amount of value out of this. You know, if you don't want to go down that process, I totally get it, you know, I understand it. But at the same point, I do think that you're leaving some money on the table. If you, you know, take one of these offers, or you go with one of these IBM programs. And if after you've had the discussion, they're willing to still do that, then hey, that's just the way that it's going to be. And again, there's going to always be a percentage of people that take that convenience factor. So we have to understand that that is going to probably grow right? But there's only a percentage rate. And maybe that right now it's 3% is what open door has. So I would say by all wire I buyers, it's probably closer to 5% right now. And maybe that number will get to 10% or 15%. Who knows? Right? What amount of people will take the convenience over the process of selling a house traditionally, but that number will go up. But there's always going to be probably more people in my opinion, that want to maximize their value. And as again, it's kind of that sliding scale, as that value starts to go down, potentially, if the market does ever change and kind of take a take a step in the other direction, which it will happen guys. It's inevitable, I think then we'll see that number swing back the other way, right. And then people start trying to maximize the value and try and sell with the realtor and go from there. So that's kind of just in general. Now there's a couple other ways that I think that you can try and help yourself in the process of talking to sellers and getting them to use you versus I buyers but one of them is embrace Technology. I think most people that use our buyers do so because of convenience, right? So if you as a real estate agent can make this process more convenient for them, I think that that will help you as well. Competing with buyers. So when I've talked about convenience, you know, things like digital signatures, if you all aren't using digital signatures, get your doc sign if like people still have to come by and sign stuff for you, or you got to meet up with them even.
Kyle Handy 29:27
You know, that's probably not a good thing, right? Unless you're working with a client that maybe that's how they want, right? And if that's the case, then they're probably not going to like the open door to begin with, that they like to just meet with people and sit face to face and they're like, you know that that type of personality. Like they're probably not even looking at open door anyways, they're probably just looking for the right real estate agent. But if you're working with somebody that's all about convenience, maybe they have a busy life, you know, schedule, work schedule, whatever that might be, like you got to make this as convenient for them as possible. Otherwise they're going to go with that. So digital signature, you know, and then on the buy side, you know, if you're trying because most people they're selling they're going to be looking to buy Also, if you're kind of going to explain to them like, Hey, you know, I know that we're just talking on the listing side here but on the buy side, I also make this easy for you, you know, I can do things like you know, 3d tours of properties, go take video of properties for you send them to you, if you can add enough value, showing them the whole experience both on the buy side and the sell side, they might be more willing to take that risk with you on the sell side. There's things like online title companies, I don't know much about them. I don't think that I think in San Antonio or in Texas, Stewart title just did the first it was in 2018. They just did their first completely digital, you know, title transaction where you know, everything was fine digitally, all the you know, paperwork was done online. Like I don't know if that's coming or going or what I would let a you know, title person kind of explain that for me. I feel that you know, meeting one time in the whole process at a title company, just to sign documents for an hour. That's not too much of an inconvenience. But you know, if it is, then hey, maybe you can find out a way that you could, you know, simplify that process a little bit easier for them doing a notary service or something like that to meet them at their work or their home, like offering to pay for that. All sorts of things that you can do to be creative to try and just make it more convenient for that particular seller.
Kyle Handy 31:31
And then the last thing you can do like I say, I mean, I did did the kind of talk about different brokerages that are starting to do their own I buyer platform. I would say most agents probably can't make their own buyer platform, but some have right where they have programs where they'll literally buy the home from the seller, if you know they don't sell in a certain amount of time, kind of like a guaranteed buyout program. There's a lot of real estate agents that do offer that and that's if you have the ability to do that or if you have somehow your setup Do that, hey, you know, that's a huge thing. I'm sure that that would help you get the listing first and foremost. And that's how most of those programs have worked for years is they have those guaranteed buyout programs, just to get them the listing, essentially, most of the time, they're never going to go through that guaranteed buyout program. Because they know that it's so low, that if they, you know, had to they can sell it retail, as like a normal real estate agent would before they would ever have to go to that buyout program, but having the buyout program available, give sellers and give sellers, that peace of mind that, hey, if things got bad, at least I've got this to kind of backup on and so then it kind of gives you one step up on the buyer platform. So those are again, just some of the different ones you can do. But again, if you don't personally have one as a real estate agent, you might look into brokerages that are starting to offer that like I said, I know Keller Williams is offering it EXP is going to start offering it here soon. That's the broker john with of course, you know, I'm kind of up on what's going there. I do know that That they are rolling out a program like that here pretty soon. And then REMAX I thought I'd heard something but I'm not sure but the cool thing with those buyer platforms when they're within the brokerage is I think they're a little bit more agent friendly. They still offer the seller kind of a guaranteed buyout, but they're doing so with a real estate agent in mind. So there's still some benefits that the real estate agent can have for introducing that relationship with the broker and the client So anyways, those would be some of the different ways that I would say that we can kind of kind of you know bridge that gap work you know, and try and compete with the buyers. I'd like to hear because we so it's at 936 I'd like to hear now guys from you kind of what you know your sales experience are I see some things in the Coldwell Banker offers one letter he says I'd like to hear your experience now because we still got some time on this call. And you know, has anybody here lost a client to and I buyer and if so, You know why like what what was their reasoning? You know how far along in the process Did you get with them before you lost them was it right away without even really considering you or what and so I saw here Gabrielle Davis if the gap is that big you could list lower like you stated in the beginning to get it sold quickly. Exactly that lower price could also create those multiple offers and increase the price. I take that strategy all day long. Absolutely. Gabrielle Yeah. So I think you just again, it's all about just education explaining it not coming from like a like a standpoint of like, No, you just shouldn't do it because it's bad. Like really, you know, explain it out right. Like tell him like the numbers you know, just say hey, you know, I'd even encourage you go look into it right like, you know, if you don't have anything to lose, you're not coming from like scarcity. I think that that resonates with that seller client of yours. So when you say hey, go get that offer from you know, perch or that offer from offer pet. Let's see what it is and then let's talk about it. Right. Let's See if it is truly the best thing for you. If you come from that mentality now you're a trusted advisor, versus just somebody that's trying to maybe try and get a sale and sell their home, you know, because it benefits you, if you can actually have, you know, the ability to tell them like go do that and then we'll take a look at it together and see if it's the best option. Well, now you have a better chance of keeping that business and explaining it to them. So Ian, you had your hand raised man, what is going on? I want to hear from
Unknown Speaker 35:26
I mean, I can speak to this just because I'm kind of going through it like as we speak. Like I
Unknown Speaker 35:31
said, I lost a
Unknown Speaker 35:34
potential listing to an AI buyer and and now I know there's two sides to every coin right? So that was an internet generated lead that I paid for Pay Per Click lead, which I did not have a relationship with. My my partner who's helping me work these leads had talked to her had a long conversation with her and she was kind of going back and forth of, Hey, you know, we might just sell it direct to I buyer. For the Zillow platform, and and actually she had an offer from open door. And the more that rod was talking to her, you know, she was looking to sell quickly. She didn't want to clean the house. There's a lot of those other things that she did not want to do to get the house ready to put on the market. So, you know, through his conversation, he had set the appointment. This was for this past Saturday. We had an appointment at her at her house at 10am. And we're all geared up, you know, ready to go get out there. And then you know, the night before she's like, Hey, I went ahead and took the offer from Zillow. So basically, after getting the offer from open door, kind of going through it, seeing all the fees that are paid out and she realized how low her net would be. She went back to the Zillow buyer and I guess renegotiate with them. Their offer came up her house was worth about 265 of what we thought we could sell it for. And Zillow ended up giving her to 55 which her net was around 240 and that's what she was trying to accomplish with us because the offer with open door would have been About $15,000 less. So that was the conversation that we had with an Internet generated lead. And then I'll flip the other side of the coin. We just put a listing on the market a week ago and that was through a direct relationship. And that house actually would qualify to sell at a discount because it's never been updated. Right. But you know, me being an investor to I didn't want to go to it was a referral, it was a family member referral, and I told rod, I was like, Look, you know, I do buy houses, but what I would need to buy pay for it. I'm not even going to waste your time because it's so significantly lower. The reason why we're putting it on the market is to pull bids up and try to find someone that's going to buy it and live in it. Because they'll pay more than someone like me that needs to buy it, renovate it, and then resell it. So back to your point, Kyle, the relationship set yourself apart by building that relationship, exceed those expectations, give them third party information. And you know, that's how we're winning sales is that is that connection and that value because I have a couple listing appointments that I've been on over the last couple weeks that, um, the people that I do have tighter relationships with, right they're communicating with me, they may go with me they may go with someone else they may I, I buy I sell it, who knows?
Kyle Handy 38:12
Unknown Speaker 38:13
but yeah, it's the battle out there. There's no doubt about it. I mean, we're in a battle of staying relevant to the consumer by these by these companies. And it's, it's important. I think
Kyle Handy 38:24
one thing you said there that I want to touch on that I think especially in the kind of that scenario where you have people they just don't want to do anything. Like they don't want to clean it, they don't want it you know, whatever that might be. And that's the other thing right? We all like we kind of talked about, like ways you can add value and you can make things more convenient. That's what this all boils down to guys like truly the the the buyer versus real estate agent, it's all basically comes down to relationship and convenience, right and trying to like make this thing easier. Well, you know, when you have a situation like that, because I've had clients that are like that Like they just, you know, they don't want to do anything, right? Like, they just literally want to move their stuff out and not have to do anything. Like, hey, that's where you as the professional, you need to have like those those connections with people that can make their life easier and say, hey, look, I totally get it. Like I remember, you know, when I moved, I don't want to do anything either. Well, I tell you what, I've worked with so many people in this in this field, that I've got trades that I can set up and coordinate for you, you know, no problem to where literally all you have to do is say yes to it. They'll be out there, you'll pay them, but they'll take care of you know, make ready You know, painting cleaning everything, whatever you need. I'll help coordinate it. I can open the doors for them to make sure that they're in the property. I can get them a lockbox. Anything you can do to like add extra value for that seller and make it easier for them. Now you're going to get some people they still just like now I don't want to do it right like and that's Hey, you can't win everyone right? But for most people, if you can show them how you can make them some more money and you can take off a lot of what might they want in their head as far as like, what they're thinking they're gonna have to do. I think that's like the winning strategy, right? Like saying, like, Hey, I know you don't want to paint. I know you don't want to have to clean, I've got the perfect make ready crew for you guys know you're gonna come in and buy me 100 bucks right for the size of your house. But you know, once you get all your stuff out there going to you know, clean it deep cleaning everything, they're going to, you know, take all the little nail holes out of the wall, patch them, you know, kind of touch up, paint them, all that kind of stuff for 800 bucks or clean the windows, they're going to clean your appliances, like you don't have to worry about any of that stuff, bathtubs, Spotnitz cabinets, they're going to do all that and that's the stuff most people don't want to mess with. Right? And if you can show them how you know, for 1000 bucks, 2000 bucks, right, they can pay that and then make an extra 10,000 bucks, you know, and then it's gonna help your job as a real estate agent because now you don't have to go and lyst this house, it's, you know, not in good shape or something like that. I think that those are the types of things that you have to do to win that business. And so sometimes that's just, you know, that's just being a realtor and most times, right like I offer that in pretty much every single one of my listing appointments, whether they're thinking about buyers or not, you know, just because I do want to make the process so easy and convenient for people, but especially in a case like this, I think that it comes, you know, you need to kind of bring that up and if that's something where they're like, just you know, don't want to mess with anything, make it easier for them make it easier for them. That's what you have to do. So cool. What else we got guys who else is has a story or a scenario working with an AI buyer? Or maybe you've lost a client? or Do we have anybody on Facebook that's watching that has used an eye buyer I'm curious to see.
Kyle Handy 41:47
See watching from Hey, what's up, Matt? Good to see you, man. Alina. Welcome. All right. The builders out there who send buyers to open door to list their building. out there. Yeah. Oh, yeah, Windows Omar, that is something you got to be aware of new home builders, right that send their, you know, if you send a client out to go looking at homes that will, you know, refer those clients that have houses to sell to open door directly. There are new home builders that do that just and they do try and like cut the realtor out of the deal. But at the same point, it all comes back to this right you've got to have a relationship like you should know, if your clients out there looking at homes and new homes, what builders they're looking at, right? You should maybe even be with them. I would imagine if they're looking now obviously there's sometimes when you just can't, but most time you should or if they're just out there looking. I think maybe it bears you know, discussion to have with them before they're you know, even out there looking with Hey, this might happen. You might need to be aware of this and kind of heading that off in the beginning. It's a lot easier to do it up front than it is down the road. Alright, cool. What else we got, guys Tim How're you on the call man? I see you there you got anything that's happened with with I buyers to you lately another we've talked about that Tammy how's it going up in your market? Do you see that as as kind of something you've been having to deal with Trenton just looking for some different feedback because I know what you guys are experiencing. Norma. Kareena Jerry, what do you guys got?
Unknown Speaker 43:28
Kyle is open door down in San Antonio.
Kyle Handy 43:32
Open Door is Tony upset.
Unknown Speaker 43:34
You hear their nice soft, dreamy ads on the radio? Oh, yeah. We're starting to
Kyle Handy 43:39
see billboards. Yeah, yeah. Oh, yeah. Absolutely. They know
Unknown Speaker 43:44
and also knock it just entered into the Dallas market. They're out of Atlanta and they have a trick kind of like a trade in program which they were doing marketing here which I responded to this because I wanted to learn more about what they're doing and You know, they basically had people or their their model is they they reach out to homeowners and said hey, you know, don't worry about selling your house if you are looking to move your house to move into a new home, you know, come come check out our program which is basically basically kind of pre qualify them right verify that they can get qualified for a mortgage and once they're qualified, they say hey, go find the house you want to move into will buy it and we'll lease it to you. I mean, how convenient is that you don't even have to do anything to your house you get up you. You go you know you get excited about buying a house you go how shopping you get, you know, once you're qualified, you find the house that you want, knock buys it they are the buyer knock is the buyer, and then you as the consumer end up renting the house from them. And then once you move into the new house, they go back and clean your house up and they list it and they sell it. And then once that deals done and then they are going to basically finance the new house to you. So it goes from a lease agreement, and then you actually purchase it. Gotcha. Those are three kinds of Separate transactions and I asked him I was like, Well, how are you guys making money? Are y'all y'all? Are y'all trying to get a margin on the price of the real estate and said, No, we're just our margins are actually the fees on the transaction. I'm just thinking, wow, that's, yeah, that's a pretty scary model to go into. Because if you think about how powerful that is, and I buyer can come in and pay you market value for your house, because they're going to pull some fees off of the deal, and they can turn around and put it back on the market at the same price or even whatever, sell it pull more fees off the deal. So yeah, that's a game changer right there.
Kyle Handy 45:32
Yeah, I mean, if you think of it in I mean, it's basically and that's what I've heard to that most of these buyers, their, their margins are in the fees, right, like the buy versus sell, like that's not so much of what they're they're banking on making their money from, they're making it from like in those cases of 6% or the 11%, whatever the fee is, and when you think about that EN like I mean it's no different like real estate agents like our our market is, you know, what we make is in the fees, right? Like, we run our business. The only difference though, is that we don't have as much inherent risk, like as long as you know, mean, of course, you take on more risk as you start to build out a team and have overhead and all this kind of stuff, you start getting risk. But if you look at like open door, their risk is in market risk, right? Like if the market shifts, and you know, all of a sudden, now they've got a big inventory of listings that they can't sell, and they've got to start it's the same thing as like a big flipper. Right? They got all these houses in the market starts to go the other way. And on
Unknown Speaker 46:27
that side of the cage, they Oh, yeah,
Kyle Handy 46:29
yeah, well, now that now all that money is at stake, right. And so as real estate agents, we to make our monies from fees, but typically, we don't have as much risk like that out there. And so, you know, so that's the biggest difference, because we know that real estate agents, it's a lucrative business, right? I mean, like, look at it like this. If you're a real estate agent selling 500 to, you know, 1000 homes a year, you're, you're a big mega agent, you're usually doing pretty, you know, doing just fine. And so that's what they're banking on is that these fees that they charge is where they make the money. The margin is Not in you know the buyer the selling the home but again you know the risk is a little bit different than the real estate agents risk and for the seller what that means to them is like yes, you know on paper like their offer might be okay. But again when you start looking at the net offer minus fees, you know, there definitely is going to be what I've seen anywhere from like a five to a 15% spread in their net to net and it just depends Do you want the convenience and Norma asked this question she's, she says, is the closing for buyers the same timeframe as working with a realtor and no, it's a little bit different. I mean, normally you know, working with a realtor it's an indefinite timeframe right? Like it could sell the first weekend and close in 30 days it could be cash it could close in 14 days. Or it could sit on the market for six months and close in seven months or could never sell right like so that's that's the real estate one with off you know, with most of these buyers, they give you an offer and they can close. Like I think the perch ones that it will close in 14 to 45 days, and you get to pick as the seller, you say which day you want to close, as long as within 14 and 45 days, that's the day close. And so people like that, right? Like, that's the good idea there. But then again, it kind of comes down to, you know, as an as an agent, right? Do, are you able to kind of explain your value proposition to that clients, they look like, hey, that offer is always going to be there. And if you're willing to take five to 15%, less than Hey, you know, go for it, right. Like, that's what you can do, you can do that today. And chances are, you'll probably be able to do that same offer in 30 to 45 days from now, if we don't sell your house the regular way. But, you know, I do think that you're leaving money on the table, and when we're talking five to 10 to 15%. That doesn't sound as much in a percentage number. Explain that to them and dollars, right, your $300,000 house 10% that's $30,000 that is a lot of money, right? You know, so make sure you're talking to them on a number level. That is Gonna make sense to them that really, because that's why again, you know, that's why people charge percentages. percentages don't sound that bad when you make it into $1 figure sounds a lot more significant, right? There's no no denial. I mean, that's what real estate agents, right? Like we, you know, it's a percentage, it's not like, Hey, we're charging you 10 grand, they'll be a lot harder to probably stomach that most of the time, it's the same reason why financial, you know, financial advisors, right, they charge 1% you know, no financial advisor that I know of charges, like an hourly rate, like, oh, you're gonna have to pay me a check for you know, 40 hours at, you know, $50 an hour that's, you know, $2,000 whatever, they can make more money doing it in percentages than an hourly rate or a flat fee or anything like that. Because most people you know, they see percentages and it doesn't make a whole lot of difference to them. So that's where it as a real estate agent, you got to relay that and yeah, okay. It says, you know, the fees are 5.7% for you know, open door, you know, know, what does that mean? Right? That's 10 grand, that's 15 grand, make it in a real terms with them. And if at that point, they're still okay with it again, sometimes you're just going to lose the business, it just happens. But most of the people, and in fact, you know, at this point 95% of the people are still using real estate agents, even if that number slips down to 10 to 15. That's just kind of finding which ones, you know, are more interested in the convenience than the sale price, but in my opinion, I don't think it'll ever be, you know, more than 15 20% something like that, because, you know, there's always people that are gonna be willing to take the convenience factor, but not that many that are going to like leave thousands and thousands of dollars on the table. So I hope that answers your question, Norma. Cool. What else we got guys, what else you're curious about got five minutes left.
Unknown Speaker 50:48
Kyle, can you hear me?
Kyle Handy 50:49
Hey, you got really Yes. What's up?
Unknown Speaker 50:51
Um, I have a question. So do they ever look at the house?
Kyle Handy 50:56
Depends. Yes and no. So some of the time You want to send pictures and from what I understand most of the time they make that initial offer without seeing the house ever. Sometimes they won't make the offer, like it's a kind of a different type of a house or maybe, you know, a weird scenario, they don't have a whole lot of data, they will need to come see it do a little bit more research, they may even send a realtor out there. A lot of these buyer programs, they are working with real estate agents. Most of the time for that initial offer, they will make that offer you know, without you know, seeing the house, but then what they do is then they set up an inspection period they call it where then they do send somebody out to go take a look at the house. And they're going to look for items that might need to be repaired, replaced, all that kind of stuff. So there's always a provision similar to like when you sell a house for a seller and there's a 10 day option period. They've got a provision in there called their inspection period, where they go out and they do take a look at the house once you've accepted that offer. And that's kind of the thing is like sometimes it's a waste of time, right? They'll make an offer And then they go out and they look at the house and you know house isn't what the buyer you know originally thought and then they're going to give you a lower offer that does happen I've heard that happen many times and so they're a first offer that you sign off on if you go that far may not actually be the full offer that you finally close on after that inspection.
Unknown Speaker 52:23
Right okay. Mm hmm. I tried to do it I was going to do all of them on my house but I'm not getting any work they work like down the block but they're not working on my house for some reason.
Kyle Handy 52:34
Gotcha. Gotcha. Yeah, it's again it's you know, it's got to meet their criteria it's got to fall in line with you know, pricing and all that kind of stuff days on market they've got a lot of you know, analytics on the back end So not every home will qualify for some of these you know, I buyer programs, but yeah, cool. What else we got? Trenton you said nope, not haven't lost any clients, but they have asked about it. Yeah. And that's what I'm seeing. For the most part only, I mean, maybe last, you know, a couple, you know, over 100 homes in the last, you know, two years or so. But again, it's not a significant portions, you know, two homes that have 100. But, but you will again, I don't I'm not saying that the discredited, I think there is a reason why they are here, I think there's a reason why they will continue to grow. But I do think that there's a fixed amount that they will So, you know, in your real estate business, you just have to look like Hey, can I take a even a 10% hit in my business? Because you probably will, right, there's going to be one of the 10 people that are going to take the convenience factor, and they're not going to sell with you because this option exists. And so you just have to kind of know it, you know, know how to explain it. So that way you can try and capture it and be a little bit better if there's that case, but but again, you know, at the end of the day, it's not something that I think we all have to just like think about it taking over the entire, you know, real estate market because there's a huge value in personal connection. And we talked about why that's so important to have with people. And you know, what you need to do to make sure that personal connection is strong. There's a huge, huge reason why, you know, people, this is a huge transaction, right? Like, I've heard people that talk about, well, you know, real estate agents, it's kind of like, it's kind of like travel agents, right? Travel advisors, like that industry just died out, right, like, once all the, you know, kayak and TripAdvisor and all these places came up, and there was really no reason why to have one in you know, and the thing about that is, I mean, travel is probably not as big of a, you know, investment as you know, as a, as a house, right. So we're talking, you know, hundreds of thousands of dollars, you know, and sometimes if you're, you know, selling and buying your half a million or more in transactions that are going to take place in 30 to 60 days. That's I mean, until the industry can get to the point where there's so many things that are streamlined, getting a mortgage title, you know, figuring out how to You know, do their house and get it, you know, marketed for the best amount most amount of money possible, until there's an automated way of doing that. I buyers are just kind of an first step or an easy step. And I mean, you know, we might be having a different conversation in 15 or 20 years. But you know, in the next few years, I think it's just mostly what we're talking about right now. Like, Hey, you got to be aware of it. You got to be knowing knowledgeable about the process, and explaining like the key differentiators and kind of going from there. But But you know, it's not like you know, real estate agents, there's no way to kind of get around that for the vast majority of people right now. So cool. What else? Anything else? Guys? Let me check my Facebook. Make sure I didn't miss anything on the chat over here. It looks like Yep, just Okay. Great information. Thanks, Mendoza. 90% of your business perfect. All right. Well, cool, guys. Well, it looks like that was that was good. If anybody's got a suggestion or a topic for next week, I'd be happy to cover it. Feel free to send your topics to Kyle at the Handy team com or message me on Facebook. But yeah, we're always open looking for new topics. I love doing these because again, I was just talking about this with an agent that was watching my Monday, masterminds, you know, week before. And that's how this topic came up, right. So that's how this stuff comes. It gets me researching it and learning about it. If there's anything you want to hear covered, you know, definitely feel free to reach out and we can talk about it. And on the next one. So, next week, I'll be coming to you guys live from Puerto Rico. So that'll be fun. Hopefully, internet wise, everything will be good there. The place we're staying should be fine, but
Unknown Speaker 56:45
I'm sure the place you're staying is going to be more than fine.
Unknown Speaker 56:50
You're hanging out with it will be paradise.
Kyle Handy 56:54
It's gonna be a good trip. We're looking forward to it. We leave this Saturday and we come back I think on Wednesday or Thursday of the following week, so we'll be there for the Monday mastermind, the Tuesday mastermind. And But guys, so excited to be doing this for you all, if there's anything I can ever do to provide more value, let me know. And again, I've got, you know, the Patreon page. So if you're just catching the tail end of this, if you want to watch the beginning, or if you missed this one entirely, or you want to go back to any of the earlier episodes, I've got, you know, think about the last 40 episodes posted on my Patreon page, feel free to go to patreon.com slash Kyle Handy. And you can sign up it's like $4 and 98 cents a month for the sales trainings for all of the Monday masterminds that we've ever done. And of course, you'll get access to all of them that we do into the future, you know, every single week I post them there in the afternoon that they're recorded. And then for 499, you get access to the Tuesday masterminds, which we do which is all on recruiting and XP, Agent attraction. And then for I think it's like eight bucks, you get access to both so Monday and Tuesdays trainings. So hopefully that that works out for everybody. That was just the best way that I could find to kind of get all this information out there in an organized fashion. But I'm so excited to be able to do this for you guys. And that y'all are, you know, continuously coming to these calls. It makes me excited to be able to provide that value. And that there's anything like I say, any topics that you want to get hurt, you know, you talked about next week, let me know. Talk to you guys. Then. Have a great week, everybody.
Unknown Speaker 58:26
Thanks, Kyle. Take care. Bye.
Kyle Handy 58:27
See you next time. Yep, see Tim later Norma Kareena Tammy little trees. Y'all have a great week.