The Game Has Changed
According to a 2019 profile of home buyers and sellers done by the National Association of Realtors, 93 percent of potential buyers said websites were their most useful information source when beginning their home search process. And with over 196 million unique users last year, Zillow is far and away the leading real estate website in the United States.
By contrast, according to the same National Association of Realtors Profile of Home Buyers and Sellers, 87 percent of people found their realtors to be just a “very useful” information resource, and only 16 percent of buyers contacted a real estate agent first when beginning the home search process.
Additionally, of buyers who used the internet during their home search (read: all of them), 87 percent found photos and 85 percent found detailed information about properties to be useful. One particularly interesting statistic: 80 percent of homes in the United States have been viewed on Zillow, regardless of their market status.
Thanks to Zestimates and Zillow’s history feature allowing potential buyers to see every price a property has ever been sold or listed at before, this evolution of real estate is quickly turning the industry into little more than a bid-ask spread. When the most important information is photos and price, average real estate agents quickly become little more than financial advisors offering tips on when to buy or sell – if that. Worst case scenario, the real estate industry is taken over by a Robinhood-style app, gamifying the market for buyers and sellers and eliminating the middleman.
For instance, right now Spark Offer is selling a home at 22 Lelands Path in Martha’s Vineyard. If you look on it’s Zillow history, you’ll see the home was once listed at $20 million, but on our site it’s listed for $10 million. As we began talking with agents, more than one told us they thought the house would sell quickly if the price came down. That’s fine, but that was all they had to say. Where’s the value in that?
Compare that with Elon Musk’s recent sale of his BelAir mansion. He listed the home on Zillow, for sale by owner, and in just a few weeks sold it to another billionaire for nearly $30 million. An interesting tidbit: before the sale went through, Elon removed the listing and the sale price was originally reported on the site at just $1 (they’ve since updated the record).
This example points at another huge problem sites like Zillow have created for the real estate industry — a new resistance to making price changes and discouraging negotiation. When a buyer can view every price a home has ever been listed at in its entire history — including recent price reductions by its current seller, it unfortunately trains the buying market to continue to wait for a lower price. And because of artificial rules and ideas about how to buy and sell a home, there isn’t a way for a seller to signal to buyers they are open to negotiation and willing to look at all offers, even ones that may be far below the property’s list price.
It’s a perfect and sad storm for agents, whose only other value proposition — their skills in negotiation and price adjustments — is also gone from their toolkit.
Enter SparkOffer. Listing your home on SparkOffer sends a signal to a broad, qualified audience that your house isn’t just for sale, it’s ON sale. It allows you to open your doors to offers and won’t trap you in a cycle of price reductions, creating a hole you can never climb out of.
Let’s say for example you own a $10 million home. By definition, that’s an illiquid property that will either sell quickly or take years to sell. But, because of any variety of motivations, for the next few weeks you’re willing to accept an offer as low as $5 million to sell the property quickly and move on.
In today’s Zillow-based marketplace, there’s no way to lower your price from $10 to $5 million for a few weeks, and then raise it again once the window has passed. You’d be alienating buyers and confusing agents who would only wonder why the price had changed so drastically — and wait for it to go back down.
SparkOffer gives you access to these tools and more, with proprietary technology that creates urgency, targeted marketing that gets your home in front of the right people, and a platform that connects you with potential buyers directly, allowing you to negotiate and come to an agreement that satisfies all parties quickly.
It’s clear that the middleman model of real estate agents is changing, and with SparkOffer you’re getting ahead of the game.