What Empowered Homebuyers Mean For The Real Estate Industry
by Arnab Dey Real Estate 20 February 2023
This is an age of consumer empowerment. Across industries and throughout sectors, consumers enjoy more resources, access, and power in their purchasing decisions than ever before.
Technology is mostly to thank here, but generational shifts toward media literacy and consumer education have also had a sizable impact on the real estate industry.
Some industries were fast to adapt to the shifting consumer landscape. The real estate industry wasn’t one of them. It took significant disruptive innovation from companies like Nobul, Open Door, and others before the industry had to react.
What Is The Definition Of Empowering Homebuyers?
Empower homebuyers is a type of loan for first-time home buyers. The empowered homebuyers are getting the loan for first-time home buyers. First-time homebuyers can get near about 17% of the home purchase price.
The main target of empowering homebuyers is to reach down payments. The lower amount of down payments means it is much easier to buy the property.
What do empowered homebuyers mean for the real estate industry? In this article, let’s explore the knock-on effects of an increasingly educated and supported real estate consumer base.
1. Increasing Tech Presence
As mentioned, technology is directly behind this push toward homebuyer empowerment. As Nobul CEO Regan McGee is putting it,
“We aim to facilitate homebuyers’ ability to choose the agent best suited to their needs.
In an interview with Superb Crew, he shared that Nobul supports consumers “end-to-end throughout their real estate journey.”
Nobul pulls this off by leveraging a proprietary AI algorithm that assigns agents a “match score” based on buyer criteria. Crucially, the platform is fully transparent, offering consumers information they can’t find elsewhere.
Therefore, it isn’t a stretch to assume that buyers, traditionally shut out of important information like transaction histories, will increasingly turn to tech companies like Nobul for support. In the real estate industry, the tech presence benefits both ways.
2. Stiffer Competition
Empowered homebuyers are picky homebuyers: there’s no sense in sugar-coating it. For an industry that conventionally ran on agent-led lead generation and word of mouth, this might be a tough pill to swallow.
The rise in consumer education and support will likely stiffen competition among practitioners (alongside other factors). Buyers don’t want a relationship with an agent based solely on their parents’ recommendation anymore; they want to experience and credentials.
Therefore, empowered homebuyers will probably introduce a significant “meritocracy” element to the industry, which won’t be a problem for good agents from the real estate industry.
Industry practitioners should understand that not everything will be harder. Yes, picky buyers will vet their agents and use technology to enforce transparency – but throughout that process, they will essentially “self-qualify.”
In the past, agents poured ample time and resources into lead generation and qualification. An entire cottage industry popped up around the process of testing buyer interest and readiness.
Now, a buyer tells you when they’re ready. They do their research in advance, look up prospective homes online and acquire online mortgage pre-approval before they even start a conversation with the real estate industry agent. This self-qualification takes a lot of effort and guesswork out of an agent’s pipeline.
4. Less Coaching, More Counsel
In the past, agents had to be the coach, counsel, and supervisor all rolled into one. It wasn’t uncommon for a new homebuyer to be completely out-of-the-loop on basic real estate matters. Homebuyer empowerment has changed that.
The average new homebuyer has already checked online market conditions indicators, used affordability calculators, and browsed listing sites for options. Therefore, an agent’s job will be less about coaching and more about utilizing their intimate knowledge of the local real estate landscape to provide counsel.
Consumer empowerment is here to stay. The real estate industry should embrace empowered homebuyers with open arms, even as that empowerment forces competition and transparency.
We all know the real estate industry level keeps changing. Along with the property price fluctuations, there are many more things that are also influencing the market.
Empowered homebuyers are increasing the number of purchases of real estate properties. Due to the high rates of the loan, many homebuyers can not proceed with home buying. What is your opinion? Are you a first-time home buyer? Share your opinion in the comment section.