The second full year of the 2020s brought the real estate industry a menagerie of notable happenings on the technology front. Thankfully, the pandemic wasn’t directly behind anything that made technology news this year, but the swell of innovation it caused is still making waves.
This was a year of maturation for new business models. While not everyone emerged as intended, others came out gleaming, augmented with venture capital and facing a frothing market.
At Inman Connect Las Vegas, Inman founder Brad Inman encouraged attendees to stop watching the change race by them. The industry needs to grow from change, and agents need to become brokers of value, not homes.
“You’re too humble to explain how hard you work and how you’re there all the time,” he said. “Well, now you may need to [explain] because you may need to articulate how representation works, what services you offer and even how you’re getting paid. So you need to find [consumers], and you need to communicate with them.”
With market data flooding the mobile feeds of consumers and mortgages packaged like value meals, agents are no longer the arbiters of the industry. It’s under the rule of a collective, and the trends and events of 2021 prove that.
So what will you do in 2022?
Zillow upends showing management with purchase of ShowingTime
If the anti-Zillow contingent was seeking another reason to spout off in our comment section, the company’s acquisition of ShowingTime made their year.
In a move that would, among many things, trigger another considerable 2021 technology trend, Zillow gave multiple listing service executives around the country a great reason to switch on their auto-responders and take shelter.
On top of its move to IDX in late 2020, Zillow’s purchase of the industry’s most accessed technology for digitally arranging a home showing cemented the portal’s transition to a model more aligned with traditional brokerages.
The move also set off federal investigations and made agents fume at the notion their showing information would wind up in the hands of such a controversial industry giant. Companies are already using showing data to adjust marketing tactics, improve listing presentations with showing frequency trends and to create pricing strategies.
“This is not about bypassing agents,” Zillow CEO Errol Samuelson said at February’s Inman Connect Now. “This is not about somehow harvesting data.”
Whether or not agents believe Samuelson, there was a notable, positive byproduct to his company’s show of financial force, and that was…
The rise of home showing innovators
The move on ShowingTime triggered a latent response from industry entrepreneurs. Oddly enough, though, Instashowing was under development months before the acquisition, making its timing in the market remarkably serendipitous.
While Instashowing won the whole-shot, it was chased into the market by host of competing solutions, all vying for a spot within the national MLS ecosystem, a race that remains without a winner.
As of December 2021, there is a growing list of showing solutions that are all working on alternative angles to adoption until the day arrives when MLS leaders can figure out how to stop paddling upstream against the wants and needs of their members and realize the importance of making decisions faster.
About Time Tours, more tour-based than showing management, is an agent-developed option out of Bend, Oregon, coincidentally the same market of origin of Instashowing.
Showingly has gained some traction, winning a partnership with Miami Association of Realtors.
However, the company said in a phone call with Inman that not knowing how the industry worked has prevented it from reaching as many agents as it hoped out of the gate. Smartly, they’ve made changes to their app and their business approach since and there are rumors something is brewing behind the scenes.
Beans Tour, a home tour app that stemmed from its founders not being able to get a pizza delivered accurately, deftly leverages geospatial technology to help agents find homes to show in tight urban environments and clustered suburban communities. It’s quite sharp.
Houston Association of Realtors committed themselves to building their own solution, called ShowingSmart. It’s big, and more of a digitization of the showing process than a more efficient way to manage the process, but it’s nonetheless a solid alternative for its members. (A review is pending.)
Say what you will about ShowingTime’s acquisition, but it opened a gaping hole in the proptech space that a number of focused innovators hustled to close. It’s a jumbled market, and certainly a few will fall through the gap.
The MLS community’s collective hesitancy to commit to new partners is only hampering the adoption of showing tech, and it’s happening under an unnecessary cloak of perceived business integrity.
Unless multiple listing services can figure out to more fully embrace their industry brethren, this may be as big a story this time next year. And on that note…
Multiple listing services are still lost on how to deliver technology
It started long before ShowingTime and Zillow, but that was the quake that cracked the mantle.
Many of the nation’s multiple listing services are now rebounding with attempts to develop and deliver technology for their members instead of seeking the best possible options in the open market.
Beyond it not being their core competency, building software isn’t easy, cheap or a one-time thing.
There’s simply no way for MLSs to create a system, continually support it and offer training and help to thousands of members (in some cases, tens of thousands) without significantly raising fees, which it will need to do in order to hire more experienced technology professionals, including expensive engineers and developers.
At Inman Connect Las Vegas, Greg Robertson, general manager of MLS at Lone Wolf, and Victor Lund, co-founder of real estate consulting firm WAV Group, tackled the lack of service MLSs are providing their brokerages in the event’s Data Track.
“The approval process of getting an app to market is ridiculous,” Robertson said, in reference to how MLSs approve third-party tech partners. “We might have an app up and running on some alpha site, some staging server, but [are then told], ‘Our MLS technology committee doesn’t meet until next month and that docket’s full, probably try the next month after that. Oh, the director is on vacation; he can’t come.’”
Lund added that brokers hire his firm to “fix problems with MLSs constantly” because they don’t want to fight with their MLS or any of their agents who are on the MLS’s board.
“They don’t want to ruffle feathers,” he said.
A number of MLSs are now making straight-up investments in third-party technologies, with two notable announcements on that front made this month.
In addition to four MLSs banding together to acquire Remine, California Regional MLS announced the formation of a venture fund and its targeting of Perchwell, a New York City-based company that offers business operation software solutions for the real estate industry.
How can this not further complicate how due diligence on other products is handled, especially when they provide comparable services? Thus, does it best serve members, or the politics and public image of their organization?
It’s also hypocritical, specifically in any case where an MLS has refused to partner with a vendor for fear of that vendor being acquired.
Tim Dain, a vice president at Remine, which was acquired by a collection of MLSs shortly before the event, said that everyone in the MLS space knows the technology needs to evolve, but “we’ve all picked a different starting point.”
Dain went to say that while many MLSs have the resources to invest in technology, the commitments of “treasure, talent and time” required to make better technology decisions are harder to come by.
From confusion on how to handle different forms of listing content to whose name is under a listing on a website or how best to handle showings, it seems the technology tide is only pulling MLS executives farther out to sea. And they’re not waving to the shore for help.
And speaking of floating off into the sunset…
Zillow shuts down Zillow Offers
It started in October with the announcement that Zillow would be “pausing” Zillow Offers, its iBuyer program, the very initiative that lurched the one-time advertising giant over the brokerage precipice.
“The pause will last at least through the end of 2021 while Zillow works through its backlog of properties that already have contracts signed and require any renovations. During this time period, Zillow will keep marketing and selling homes through Zillow Offers,” an Inman report stated.
Then a few days later, Zillow announced it couldn’t stick the landing.
The company is now in the process of shedding its home inventory. It’s dumped close to half.
Throbbing waves of schadenfreude shook through agent circles and Inman comment sections as the industry celebrated its perceived nemesis’s admittance that, basically, selling homes is hard work.
Yet, it’s not nearly that simple. Nor is it good news that thousands of houses have to be sold under unnatural market forces. There is no winner here. In fact, Zillow ended up bolstering the bottom line of an institutional home investor not in the business of selling homes, only renting them.
“In mid-November, news outlets reported that the Seattle-based listing giant had struck an agreement to sell 2,000 of its homes to New York City investment firm Pretium Partners, which has a portfolio of 70,000 single-family home rentals across 20 markets,” Inman reported.
Not all of Zillow’s homes ended up with large firms, but many are now in the hands of investors, according the Inman story.
Still, while Zillow no doubt took a couple on the chin, exciting the masses, it never needed so much as a standing eight-count. There’s a lot of industry intelligence behind the company, and the category isn’t going away, it’s actually…
A new alternative for sellers
The last year saw a number of new players emerge in the corporate quick-sale category. The model is simple: sell faster, a little cheaper and a little easier, to a company instead of the open market.
It’s not for everyone, but it sure seems to be for more people than we thought going into 2021. In fact, these kind of sales have reached the point of becoming a smart option for agents to discuss with their sellers, despite representing only about 1 percent of all sales, according to Keller Offers’ RJ Jones.
At Inman Connect Las Vegas, Jones said that these kinds of sales offer more, and unique, opportunities for listing agents.
“We’re partnership and source agnostic. We want to help the agent offer great solutions. Is the seller driven by price and profit? Or timing and convenience? Sometimes it’s a traditional sale or sometimes it’s ‘what iBuyers can we work with?’”
The agent can more easily transition to an advisory role, Jones said. Should the seller want to test the open market, an agent then resumes their role as service provider.
As it turns out, however, iBuyers may eclipse Jones’ number of 1 percent of total sales by year’s end. From July 1 to September 30, Opendoor, Zillow Offers, Offerpad and RedfinNow collectively accounted for 1.9 percent of U.S. home sales, according to an Inman report.
It’s not only about the fast-turnaround. IBuyers are largely highly tech-enabled, their companies were built around technology from the start, making them more apt to use in-house software to improve the transaction pace and overall user experience.
Even though brokerages are also being encouraged to create their own iBuying solutions, there’s no reason to not form working relationships with existing, proven providers as you set goals for 2022.
Ultimately, sellers remember the solution their agent facilitated, not who bought the home.
Plus, thanks to 2021, homes aren’t the only thing selling like crazy, as…
Proptech acquisitions become the norm
Canada’s Lone Wolf Technologies bought five companies in nine months, four in 2021.
Not to be outdone, Elm Street Technologies acquired five as well but all of them in 2021:
Constellation Real Estate Group has expanded tremendously through acquisition the last couple of years, buying TopProducer this year. Before that, it scooped up data company Offrs, then TORCHx, Mortgage Builder, Virtual Properties, Paradym.
And of course, there was the biggest one of 2021.
But it’s not all tech buying tech, brokerages are growing through acquisition, as well, largely as part of a greater industry shift to consolidate services, a somewhat stand-alone trend, but one that is directly connected to why so many acquisitions are happening.
Brokerages are building up mortgage, property maintenance and other home services offerings to hang on to the consumer for as long as possible. It’s also happening because brokerages need to add as much value as possible in the wake of so much consumer-facing innovation and team expansion, another driver of the acquisition trend.
On top of that, companies have emerged to assist brokers, teams and agents in that effort.
Place, for example, helps top-producing agents fortify their brand, decide on technology tools and establish a business structure around it. Baird & Warner launched Balance, an internal tech-forward solution for helping brokers and agents onboard listings, oversee transactions and execute marketing strategies. Side does the same thing for real estate team branding and growth.
Other notable technology trends of 2021 that are sure to carry over into 2022 include the deep integration of market and consumer data (a trend that carries some risk) into the gamut of technology products and venture capital’s recognition of proptech’s potential.
Oh, and anything having to do with Zillow.