T3 Insight

Tracking tech consolidation, cultivating culture remotely + picking tech agents will use

Articles in this Edition

In this edition of T3 Insight, T3 Sixty's latest monthly analysis of the residential real estate brokerage industry includes articles on Tracking tech consolidation, cultivating culture remotely + picking tech agents will use. Take a deep dive below.
Released March 18, 2021

Mapping real estate’s technology giants

by: Paul Hagey

How to cultivate a vibrant remote team culture

by: Kelly White

How to pick technology your agents will use

by: Travis Saxton

What We're Reading

In addition to the articles, here are a few items we are reading from across the internet.

Americans migrating to the South and West

Freddie Mac studied U.S. migration trends in the decade from 2010-2019 and found that the populations of the South and West are growing fastest in the U.S. Over that period, the metros of Austin, Texas, and Raleigh, North Carolina, grew the fastest and second fastest, respectively, followed by Orlando, Florida, Houston and San Antonio. The study also finds that these growths occurred predominantly in the suburbs of those metros versus the city centers, and that population growth doesn’t correlate directly with home price increases. Home price increases, Freddie Mac found, increase more based on per-capita income. As the nation undergoes a great reshuffling in response to the pandemic, and the increased work flexibility it provides, these trends appear likely to continue. House prices, warmer weather and suburban space will continue to pull buyers.

  • Freddie Mac
Opendoor rolls out cash-backed offers for buyers

Opendoor, which pioneered iBuying when it launched in Phoenix in 2014, has introduced cash-backed offers to buyers in 13 of its markets, joining other iFunders who have jumped in with two feet into the alternative real estate financing world. Like iBuying, cash-backed offers adds a bit more risk for the company, but secures it valuable mortgage business, something it, many other brokerage companies, covet as key parts of their business models. In an inventory-starved market, as exist today in most areas of the U.S., cash-backed offers free of financing and other contingencies give buyers a leg up, and, Opendoor a seller, if the buyer also has a home to sell. These continued innovations around alternative financing in real estate are upping consumer competition for brokerages and lenders.

  • Opendoor
Redfin acquires RentPath for $608M

In the interest of building out the extreme top-of-funnel in home sales, real estate companies have been building out rental strategies, with increasing force. Zillow Group has increased its focuse on this in recent years, and now Redfin dives into rentals with its pending acquisition of RentPath. CoStar Group, which just jumped into the residential real estate sales arena with its December acquisition of Homesnap, had tried to acquire RentPath in 2020, but the U.S. Federal Trade Commission, citing its anticompetitive outcome, sued to block it from going through. CoStar owns Apartments.com, which it acquired in 2014 for $585 million. As the residential real estate space deepens and broadens with consolidation and massive outside investment, all parts of the residential ecosystem will be increasingly mined. The dive into rentals by these companies is an example.

  • Redfin
Title startup States Title, now dba Doma, to go public via SPAC

The real estate money train keeps chugging along as another residential real estate tech startup is set to go public via SPAC. Opendoor was the first to usher in this popular go-public route when it went public in December 2020. Doma, which streamlined and digitized the title process and founded in late 2016, posted a net loss of $35.1 million in 2020 with expected 2021 losses of $103.1 million. Closing services and other services ancillary to brokerage continue to get swept up in the momentum as the brokerage industry consolidates and matures.

  • The Real Deal
Compass files S-1

Compass filed its long-awaited financial registration statement on March 1 as it prepares for its IPO. In it, the company revealed staggering revenue, and losses. The company pulled in $3.7 billion in revenue in 2020 with a net loss of $270 million, and also reported nearly $152 billion in 2020 sales volume, which puts it solidly in the running for the nation’s second largest brokerage by annual sales volume, in competition with HomeServices of America (both likely behind Realogy Brokerage Group, when audited numbers come out in the 2021 Mega 1000 in a few weeks).

  • Bloomberg
Zillow launches ‘Live Offers’ in 20 markets

On the heels of a standout fourth quarter 2020 earnings release, in which it reported a net income of $46 million on $789 million in revenue, Zillow Group announced that it is turning the Zestimate into a live offer in 20 of the markets where it operates its iBuying service Zillow Offers. The live offer is contingent on Zillow reviewing more details about the house and inspecting it, but the move brings real estate one step closer to pricing transparency in these markets. In theory, these “live offers,” would create price floors for these homes, and listing agents looking to earn sellers’ business, would have to say they could feasibly list and sell the home for at least as much as the offer.

  • Notorious Rob
Discount brokerage REX sues Zillow, Trulia and NAR

With Zillow Group’s switch to displaying listings via IDX as a brokerage participant in MLSs across the country earlier this year, it began displaying IDX listings on Zillow and Trulia more prominently than those from other sources, such as FSBOs and other extra-MLS locations. And startup brokerage REX – which does not list its homes for sale in MLSs – has sued Zillow Group and NAR, alleging that the change on Zillow and Trulia disproportionately benefits MLS participants and that NAR rules that govern IDX policy create an anticompetitive environment. REX has been aggressive in advocating for changes that would benefit its business model, which centers on buying and selling homes outside of the MLS. It played a role in the U.S. Department of Justice’s lawsuit against NAR that led to a settlement in which NAR agreed to allow MLSs to publicly display buyer-broker commissions. The company also sued Oregon in December, alleging that a law that blocks homebuyer-rebate violates antitrust statutes. The increased scrutiny around the industry’s commission practices, and aggressive action from companies like REX, will drive increased conversation around long-time industry norms, as finance and technology continue to evolve the industry.

  • Inman