In a world ruled by technology and automation, today’s consumer is being turned into the “expert” on things like banking (there’s an app for that), healthcare (WebMD symptom checker, anyone?), and real estate (For Sale By Owner, FTW!).
When it comes to real estate, though, nothing beats the human professional, and I wholeheartedly agree with a recent statement by William E. Brown, 2017 President of the National Association of REALTORS®: “There’s a human element to buying and selling a home that can’t be replaced.”
But today’s sellers are being wined and dined by the likes of OpenDoor.com and OfferPad.com, which offer attractive online platforms that promise a quick, hassle-free, cash sale. Zillow recently joined this fray, introducing its “Instant Offers” platform in Phoenix, Las Vegas, and Orlando. The platform enables sellers to receive and compare cash offers from selected investors, as well as obtain a CMA from a Zillow Premier Agent.
In addition to catching sellers’ attention, these online investor sales may be exacerbating an already tight inventory situation. Instant Offers, for example, connects sellers with a small group of investors who are partnering with Zillow. Sellers who go that route are taking their home out of the inventory for the average buyer.
A lack of inventory has plagued the Lehigh Valley housing market over the last two years. In July, the most recent statistics available as I write this article, saw inventory levels shrink 39.5 percent to 2,321 units. Months Supply of Inventory dropped 42.4 percent to 3.4 months (a severe lean in favor of sellers). Most economists consider a balanced market to be a five- to six-month supply.
In addition, sellers who choose direct sales aren’t listing their property on the Multiple Listing Service (MLS), which could affect the reliability of MLS data. Not just real estate professionals but also economists and governments use that data to spot market trends, determine fair market values, and make plans.
I’m not here to tell sellers (or buyers) to not utilize online platforms for their real estate needs because it’s none of my business and illegal. While our REALTOR® members may be unhappy with technological advancements that drive consumers in a different direction, it is unlawful for associations to encourage or facilitate the withholding of listings or business from any company.
Instead, I choose to educate on the value of a REALTOR®. To the seller who is considering the option of a direct, cash sale, I want you to keep a few things in mind:
REALTORS® work in your market and know the community better than any website could.
REALTORS® will help you get your house ready for sale.
REALTORS® will market your home to the widest possible audience, not just investors seeking to make a profit on your home.
REALTORS® will aim to get you the best offer possible and have the skills to help you negotiate the terms of the sale.
REALTORS® follow a Code of Ethics that includes a pledge to “protect and promote the
interests of their client” (Article 1). These online companies may facilitate your transaction, but not necessarily with your interests in mind.
I understand the importance of an online presence, especially in real estate. According to the National Association of REALTORS®’ 2016 Profile of Home Buyers and Sellers, 51 percent of home buyers found the home they purchased online.
Just remember that Online + REALTOR® = Best Case Scenario and Biggest Return.