- By Michael E. Kanell The Atlanta Journal-Constitution
Technology has forever changed many of the ways we conduct business.
We don’t shop the way our parents did. We don’t catch rides the way we did a decade ago. And now, the way we buy and sell real estate may only require a computer or cellphone.
Two companies operating in metro Atlanta are hoping to lead that change.
“The key takeaway is that we are trying to revolutionize the way people buy and sell homes,” said David Zanaty, eastern regional manager for Opendoor, a San Francisco-based company. “We are trying to bring to real estate what Amazon brought to retail, what Uber and Lyft brought to transportation.”
Here too, the concept is about speed and efficiency.
You want to sell your home, just go to a web site, pop in your address and within 48 hours, you’ll have an offer. Like that price and you can have a deal and a closing – in as soon as six days.
No listing or broker required.
Want to buy a home? Well, there’s an app for that as well. Check out homes for sale online, then visit the home you want to buy, tap the app on your phone, and the front door unlocks. Wander through the house by yourself – no broker escort needed. Let yourself out and the door locks behind you.
It’s unclear if these “iBuyers” will decimate the ranks of real estate agent jobs or provide better deals for consumers.
But Wall Street analysts say the iBuyers – like Opendoor or competitor Offerpad – can make it easier and quicker to sell homes. And if they can get homeowners to move once more in their lifetimes, “we estimate existing home sales would be almost 40 percent higher,” said an analysts’ report at Evercore ISI in New York.
If the iBuyers gain 10 percent of the market, the added churn would push sales of homes 21 percent higher, according to the Evercore analysis.
The market opportunity is large in metro Atlanta.
Last year, 65,952 homes were sold, according to Re/Max Georgia. At the median sale price of $239,000 that is a market of $15.8 billion, which is currently dominated by traditional brokerage companies that employ thousands of people.
Working with agents
Coldwell Banker Residential Brokerage knows and uses some of the new technologies, said Laura Rittenberg, president of the Atlanta-based company. “I think it will enhance our business. I don’t think it will replace what we do.”
For example, Coldwell uses software that can predict the most likely places where a buyer lives even before a home is even listed for sale, she said. “That’s something we never could do before. It gives our sellers an edge, so we can go out and target those potential buyers.”
She agrees that technology can grease the skids on the sale process and might be useful to sellers who need to get out quickly, but she’s skeptical about the prices sellers will get. “It’s not about selling your house. It’s about selling your house for the best price.”
She scoffed at comparisons to ride-sharing. “This is something entirely different. A ride from the airport might be $30. There’s a difference between that and my life savings in my home.”
A company like Opendoor is a little like a “flipper,” buying a home just to sell it. Opendoor uses a network of contractors to make improvements and it has has enough capital to take its time.
And the company says it is happy to work with real estate agents.
For instance, Katherine Brown came to an Opendoor-owned home on a quiet Marietta street one day last week, escorted by Erik Dowdy, an agent with Engel & Volkers Atlanta. “I would not make a decision without a Realtor because of his expertise and knowledge,” she said.
Recently returned to Atlanta from Orlando, Brown has been house-hunting, looking for a good school district that’s not too far from her daughter’s dance studio.
Dowdy tapped an app on his phone and the door unlocked.
They let themselves in and showed themselves around the four-bedroom, three-bath, 2,578-square-foot home. Much of it looked new – a sign that Opendoor had made substantial renovations.
The house was listed for $488,000. Brown liked it, perhaps enough to make an offer.
‘Each house is unique’
Use of the web is the wave of the future, agreed Jani Strand, senior vice president at Redfin, a national brokerage.
“We use algorithms too,” she said. “We look at that as a starting point. We still have a human being come in.”
For instance, Redfin offered three-dimensional tours on line. And Redfin is experimenting in some markets with the quick-price-via-the-internet idea.
“But each house is unique. It is not the same as selling books or flat screen televisions. And it’s a high-stakes transaction. But it’s not replacing human beings. It is enhancing the process.”
The process worked last summer for Abigail Keenan and her husband.
They were living in Tucker and disgruntled about the house and neighborhood. Then they got a postcard in the mail promoting Opendoor, she said. “We were very skeptical. We wondered if it was legit, but we thought we’d give it a try.”
They punched in their address.
“The process was so easy – that is what is so appealing,” she said. “And the offer we got was surprisingly competitive, but we hadn’t found another house yet.”
They let the offer expire, then returned to Opendoor when they had picked out a house they wanted in Auburn, about 40 miles northeast of Atlanta. Again, they punched in their address and this time they made a deal.
“It was a cake walk,” Keenan said.
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