The Rise of iBuyers and The Death of Marketing As We Know It

Hey there Business Freedom podcast listeners. Today I want to dive deep into, let's call this the rise of the ibuyer and the death of marketing as we know it. And so I'm in Charlotte, North Carolina. I have a real estate team, been at the real estate business about I guess 2007 as a solo agent, launched a team 2009. So it's about 10 years as a real estate team owner and six or so years as a business, real estate team leader, business trainer. And so I have a unique perspective on this. I get to speak to a lot of real estate team leaders around the country. And the thing that is happening in the big markets and so I'm in Charlotte, North Carolina, we have Zillow. So if you're in a major market and you go to do anything on your phone, even commercials now they're going to buy your home, they're going to make it easy. Like one click your home disappears. You know, you're magically in your new home and you get all the, all the money, you know, and there's your cost for it. Obviously I'm being a little, a little tongue in cheek there, but there's offer pad here, there's. What's the other big one? There's like so there's three major ones in our market here and the messaging is they have lots of money. I do believe these are profit for this part of their business. I believe these are profit optional companies. Well back financially and they're buying up all the mass media in all the markets. And so we've seen our radio returns decline substantially and it's really impacted our approach. And I'm going to get into that in a second and it ties in. Right. So as I believe as like as more people are doing one thing, my mindset around it has shifted. When I first got into real estate I would copy other people and now I'm just like, I'm running the other way. So. So if these ibuyers are buying up radio and all the, we've got some big teams here that I know are six figures. One I know is spending $150,000 a month on mass media. And I know the returns. I've been doing radio forever. I've got the two best endorsements in my market and we've just seen returns. They're not negative, but they're not what they used to be. And so we're just watching that really, really closely. And it's, you can't compete with it. You know, the venture capital flowing into the real Estate space right now is it is. It is unbelievable. I think last year was 3 billion. All the years before that it didn't total 3 billion. And this year I think it's estimated at like I'm going to make up a number because most numbers are made up. I think it's like 6 to 7 billion just coming into our space. So what do we do as real estate team leaders? That's the real question. Right. We set up these businesses as, you know, let's just get on radio, let's do some tv, maybe we'll throw up some billboards. And that was the way that we were able to build these 40, 50, 60, $100 million real estate teams. And now all that is getting taken away from us media is costing more. And here's the thing, the weird thing is that I believe that media. So radio, for example. I don't think it's the future of real estate teams in terms of how to get a message out. We're working really hard on the right messaging. We're including live client testimonials and the stuff we do and all of that to stay. It's not working the way that it used to work because of all this competition. So what does a real estate team leader do? My. Here's what I think we all need to do and this is what we've done really, really well. And it's taken us two years to build this up. It's going back to the way that business used to be done. A very personal, very caring approach to business. If you've read the book thank youk Economy by Gary Vaynerchuk, I don't agree with a lot of his style and I agree with the return to the way business was like in probably the 1950s. I was born in 1973, but I can imagine you go into your local hardware store and the guy knows your family, he's engaged. He's going to help you make the right decision on which grill to buy or how to. It's going back to that way of doing business and providing an experience and a service that's very, very personal. That combined with the trifecta. Well, not trifecta because it's 4 whatever the 4 fecta is. There's this perfect storm of shifts, shifts S H I F T S. Right. It's a shift storm. Right now there's ibuyers. So just changing business model. Right. There's consumer shift and I'll get into that in a second. There's the technology shift. We haven't even Quite seen that in real estate yet. But technology, artificial intelligence is going to, it's just going to transform and disrupt the heck out of our industry. And then there is just an economic shift. At some point we're going to have an economic shift here. So I want to cover two things. I want to cover the changing business model and I want to cover the consumer shift. So if you're a real estate team leader and your team, your business is run pretty loose. You're not really focused 100% on a Ritz Carlton experience for clients. You know, your agents sort of come and go as they please. You buy some leads, you hope they follow up with them the right way. That's going to lose. You're going to die. It might be a slow death. I just know in my heart a business that's loosely run in as hyper competitive industries we're in is going to suffer tremendously. And as a consumer, because here's the thing, a consumer is getting served at the highest level in every area of their life, right? They can send their laundry out, they can have food delivered to their front door. They can, we have a topgolf in our market which is like a driving range that you've never freaking seen before. They go to an Apple store, they can pick up an Uber, even entertainment. Like I went to a Zach Brown band concert and it was just the most unbelievable experience. And these guys were so entertaining. They do all of that and then they come in to meet with a real estate agent. And if you're not building your real estate team to compete with how awesome all of that is, not to say like $100 million production of a movie or you know, what they're consuming, you know, on their device and what we have access to that just sort of, it builds up our expectations of how the rest of our life is supposed to be. You need to be thinking about your business that way. Really and truly thinking about your business that way. That's the first thing. The second thing I talked about the business model shift and the venture capital coming in the ibuyers, but also if you look at probably the best run real estate team and I heard Tim Heil, who I respect immensely, the guy is on point and really open in his views. The things he did right and the things he did wrong in his business growth journey. You know, he said this at an event that I saw him speak at recently. He said that probably the best, the guy that's ahead of every one of us as real estate team leaders is Redfin. You know, we want to think they're like the enemy or they're not doing something right or you know, they're undercutting us or if you look at them in the context of like how consumers want to be interacted with, how to maximize, put an agent in their highest and best use. The average transaction count per redfin agent is 38 transactions. Most real estate teams don't have a 38 transaction average because they're just loose collection of agents. And even though they may not be the best experience yet for buyers and sellers, they're advertising on TV and in my Facebook feed, the 1% listing. So they're buying, they're getting the buy side by discounting the list side, they're disrupting the industry. They're not going to give up, they're well backed financially and they're profit optional at this point. They could pull a profit but they're reinvesting in just taking over the industry. So if we ignore that as real estate team leaders, just the changing business model, the changing consumer, the shift in consumers and then just a regular economic shift and then technology, you know, artificial intelligence and how we interact with the consumer like a Netflix does, right? Netflix knows what I like. You know, Apple, itunes, they know what I like. And because of artificial intelligence is constantly working in the background to put things in front of me that are, you know, that are a fit for what I'm looking for. And right now there isn't a public facing technology that does that. It's very much consumer driven. I want three bedrooms, I want two baths. I want, you know, this square footage. It's, it's only driven by. So there is no Netflix app for a consumer when it comes to real estate. But that's coming very, very quickly. Gary Keller is, you know, he launched it and is working on going big with it. So it's definitely here and coming and it's going to disrupt the industry. So all of that is to say that if you're not as a team leader, if you're not calibrating your mind around ibuyers and the shifting business model and consumer shift and the death of marketing as we know it. And so the second side of this, I'm running a little bit long here because I want to make sure you understand the second side of it. The second side of it is that I'll talk to a real estate team leader, I'll say, so what do you invest in your marketing? Where do you spend your marketing dollars? And they'll say, well, I buy Zillow, I do Pay per click. I do some Realtor, you know, that's about it. And then maybe that maybe they do radio. And I'm like first of all going to Zillow or realtor.com and paying somebody that's a better marketer than you for a lead. That's not marketing, right? Taking a listing and generating a bunch of buyers yourself via yard marketing or open houses or you know, Facebook ads. I mean we do a lot to generate buyers but we pay nobody at this point. We have a Zillow Premier account and that is it. We don't do any paid home search traffic because it's not where the future is. What got us here is not going to get us there. So that's one thing to consider. What are you really doing to market your business right? Is it all about you and you being number one? Are you telling these intimate stories about your client's successes and interweaving the fact that you're really doing great work for your clients as a way to get future business and just an approach to a high level of service that's gonna have you impenetrable when all this comes down, as it continues to come down. So that's the other side of it, the death of marketing as we know it. As agents. If, if you're spending a bunch of money on radio or Zillow or realtor.com or billboards or TV, I feel sorry for you because it's like an addiction. You have to keep doing the thing. You grow to make less margin, you spend more money to make less dollars on the bottom line. And margins are going to decline on all of those media sources, especially paying someone else to generate buyer leads for you. So that's not to say that we don't have a buyer lead gen platform. We do, we just don't pay. You know, Boomtown is our platform. But we don't pay a whole bunch of money to Google or to Zillow or any of those. And we're not doing any of those bolt on technologies to maximize a lead source. That is a complete grind. And so anyway, that's the thoughts I have for you. It is the rise of the ibuyer and a smarter consumer and the death of traditional marketing as we know it. And if you don't get on board and you don't get your head out of the sand, you are going to be left behind. If you are at a point in your business journey where you are a team leader and the three factors I look at if your time isn't your own. You're not making the kind of money that you want to make and you have more stress than is manageable or reasonable. You've got to take a look at yourself and your business and you've got to take a step. The only ask I've got nothing to sell you. It's simply a conversation about what's working, what's not working in your business and really diving deep into that time money stress equation. If it's a small team, if it's you, a couple buyer agents and an admin and you don't know what you're doing, or it doesn't feel like you're on the right path, let's have a conversation. If you're a big real estate team and you look back in the last three years and you don't have a whole lot to show for all the effort you put in your business isn't sustainable, it's not self managed. You don't have a plan for net worth, you're not working to a plan. You're still spending money on a bunch of lead sources that others are generating. You've got to just take a look, just slow the process down, take a look at the business. And we can do that in a business growth strategy session. So go to realestatebschool. Com, the next step on that site is obvious and we'll see you there. Be good.