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iBuying Goes Mainstream Presentation

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My presentation from Inman Connect, February 2019, covering the rise of iBuyers, the evolution of portals, and who wins.

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iBuying Goes Mainstream Presentation

  1. 1. iBuying Goes Mainstream: How Big Can it Get? Prepared by Mike DelPrete, February 2019
  2. 2. The railroads are in trouble because they assumed themselves to be in the railroad business rather than in the transportation business. — Theodore Levitt, 1960 “ ”
  3. 3. Closer to the transaction Far from the transaction More of the transaction Less of the transaction
  4. 4. Closer to the transaction Far from the transaction More of the transaction Less of the transaction
  5. 5. Closer to the transaction Far from the transaction More of the transaction Less of the transaction
  6. 6. Closer to the transaction Far from the transaction More of the transaction Less of the transaction
  7. 7. Closer to the transaction Far from the transaction More of the transaction Less of the transaction Advertising Finance Agent Commissions Moving Utilities Title Insurance
  8. 8. Closer to the transaction Far from the transaction More of the transaction Less of the transaction Zillow Offers, Mortgage Opcity
  9. 9. Closer to the transaction Far from the transaction More of the transaction Less of the transaction
  10. 10. Closer to the transaction Far from the transaction More of the transaction Less of the transaction Search Engine
  11. 11. Closer to the transaction Far from the transaction More of the transaction Less of the transaction Search Engine Service Engine
  12. 12. iBuyer Insights
  13. 13. 0.2%
  14. 14. 5%
  15. 15. 3%
  16. 16. Included Excluded Single-family detached, townhouse and condos New homes Short sales and pre-foreclosures Mobile and manufactured homes Normal sales through MLS and outside MLS Bank-owned homes Investor purchases and sales GSE-owned homes Maricopa and Pinal counties HUD-owned homes All price ranges Trustee sales Sheriff sales IRS sales Sales under eminent domain Bulk sales (e.g. investor to investor) 7,370 + 7,370 253 + 180 = 3%November:
  17. 17. 1 market 2 markets 4 markets 16 markets
  18. 18. $16,800 $11,400 $9,200
  19. 19. It’s all about seller leads.
  20. 20. 200 20,000 Purchases Leads 1,354 2,700Offers
  21. 21. The single biggest hurdle facing iBuyers is human psychology.
  22. 22. High Value Low Value Low Frequency High Frequency
  23. 23. High Value Low Value Low Frequency High Frequency
  24. 24. High Value Low Value Low Frequency High Frequency Divorce lawyers Investment bankers
  25. 25. High Value Low Value Low Frequency High Frequency Divorce lawyers Investment bankers
  26. 26. High Value Low Value Low Frequency High Frequency Hard to disrupt Easy to disrupt
  27. 27. Purplebricks 8% Redfin Compass 10% 3% Duopropio 10% DuProprio
  28. 28. Purplebricks 8% Redfin Compass 10% 3% Duopropio 10% DuProprio Compass often describes itself (and is valued) as a technology company. Is it?
  29. 29. Who wins?
  30. 30. The best business models are exponentially better.
  31. 31. 0 15 30 45 60 Industry Average Compass Redfin Purplebricks (U.K.) Avg. # of Transactions/Agent/Year www.mikedp.com
  32. 32. 0 15 30 45 60 Industry Average Compass Redfin Purplebricks (U.K.) Avg. # of Transactions/Agent/Year www.mikedp.com
  33. 33. 0 15 30 45 60 Industry Average Compass Redfin Purplebricks (U.K.) Avg. # of Transactions/Agent/Year www.mikedp.com
  34. 34. 0 15 30 45 60 Industry Average Compass Redfin Purplebricks (U.K.) Avg. # of Transactions/Agent/Year www.mikedp.com 10X
  35. 35. The start of the consumer journey is critical.
  36. 36. 200 20,000 Purchases Leads
  37. 37. Will consumers price compare iBuyers?
  38. 38. Will consumers price compare iBuyers? 65%
  39. 39. Will consumers price compare iBuyers? 65% 77%
  40. 40. The nightmare scenario…
  41. 41. Deep pockets win.
  42. 42. £0 £20,000,000 £40,000,000 £60,000,000 £80,000,000 £100,000,000 0 4,000 8,000 12,000 16,000 20,000 Purplebricks Yopa Emoov HouseSimple EasyProperty Settled Market traction relative to money raised (U.K.) Live Listings Money Raised (pounds) www.mikedp.com
  43. 43. £0 £20,000,000 £40,000,000 £60,000,000 £80,000,000 £100,000,000 0 4,000 8,000 12,000 16,000 20,000 Purplebricks Yopa Emoov HouseSimple EasyProperty Settled Market traction relative to money raised (U.K.) Live Listings Money Raised (pounds) www.mikedp.com 10X
  44. 44. $80M equity raised $60.5M equity raised $6B market cap $1.045B equity raised $1.5B market cap
  45. 45. 10X
  46. 46. The new models shaking up the industry are not new ideas. They are doing what’s only possible with lots of money.
  47. 47. Who wins?
  48. 48. Who wins? - Exponential improvements - Start of the consumer journey - Deep pockets
  49. 49. Intelligence is the ability to adapt to change. — Stephen Hawking “ ”
  50. 50. Mike DelPrete www.mikedp.com

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