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The Future of Real Estate, and How Investors Can Profit From It

By Matthew Frankel, CFP® – Updated Sep 1, 2021 at 4:32PM

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Could the way we buy and sell houses change dramatically in the next couple of decades?

Longtime contributor and real estate investor Matt Frankel, CFP, believes that within two decades, the traditional model of buying and selling real estate will go away, and iBuying -- selling your home directly to companies -- will dominate the market. In this Fool Live video clip, recorded on Aug. 23, Frankel speaks with Offerpad CEO Brian Bair to get his take on the future of real estate prior to Offerpad's planned SPAC merger with Supernova Partners Acquisition (SPNV)

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Matt Frankel: With the few minutes I have left, I wanted to dig into your future vision for the company. I consider myself to be an ultra long-term investor and a lot of people at The Motley Fool feel that way. I've had an argument with one of my editors for the longest time. I say within two decades, this is going to be how we buy and sell houses in the United States. I mentioned some rural areas, there are going to be some exceptions where the traditional model will be necessary, but some of them are bullish on iBuying but disagree with me. Who's right?

Brian Bair: I think you're right. I don't know what that number is going to be, but I will tell you, the way I look at all of this like first thing I'll use a baseball reference. We're in the top of the first, think about everything we've done and we created and what we've done in real estate so far and we're literally just getting started. There's so much opportunity ahead of us, but the other one, the way we look at it just from a practical standpoint, the way that majority of people are transacting real estate right now. It's cumbersome, there's so much burden on them. The way I always look at it, why wouldn't they, if we can provide a strong cash offer, they can control the process. You don't have to go through any of the showings or contracts following through anything that happens with traditional side, why wouldn't they? Then with our other products, if we can provide products like they could list their house on the open market. We could invest in their house to try to maximize their price. We can provide them other services and products with doing that, why would anyone go the way that they don't have the certainty and control. I'm extremely bullish on where the market is going to be going and how early it is in the process and one of the education that I'm talking to investors and others about is just remember guys, this is early in the process and it's different than food delivery. It's different, we're keeping going into a technology and they're ordering through delivery company three and four times a week. This is transacting real estate, there's so much, but as market footprint and our market shares grow, more people are going to come to us first before going to the traditional way. The one subtle brag or brag in here, just with this. Right now, 95% of our customers satisfied. We have an NPS score of over 80 on the NPS score. I'm bragging a little bit, but also I just want to really clarify the point is, when customers use it, they leave with, "Hey, this is too good to be true, this is such an awesome opportunity, such an easier process than it was going the old way." When something's broken and you can fix it, there's massive opportunity there.

Frankel: This is my last one and then I'll give you the last word. I know you're in hyper-growth mode right now. I don't have it in front of me, but I know you like pretty much doubled over the past year in size, at least. Where do you see Offerpad in 10 years?

Bair: Listen, I think this is the magic wand, this is where real estate, this is where Offerpad is going to be and this is the transition of real estate it's going to get from the consumer. There's going to be a one-stop platform, an end-to-end platform, that people will come to and anything they can think of real estate is there. For example, the average homeowner has to make 78 points of contact to sell one home. Talking to all the people that are involved in that transaction. Then once they close the home they've got to hire landscapers, they got to hire pool people, they got a higher, smart home tech, whatever it is, but we're real estate is going to go with people can trade in their houses, push it back like they can do, we made it there. They can be they can do that now, but they're going to be bundling all the services, bundling mortgage, bundling titles, bundling landscaping, pool services, smart home technology, energy efficiency. What they want to do it all with a few clicks of a button, they're going to say money by bundling and it's a massive opportunity for Offerpad because we're going to stay with that homeowner for the next several years and as a part of that home journey. The minute they want to trade in their house, they can push it but and we can buy their house, they can move up and move down. That's where real estate is just going to go and if that takes five years or 10 years, I don't know. We're going to be pushing it heavy, but I think that's where this isn't just about iBuying, it's about the full solution-integrated system that customers are going to get that's going to be easier for them and they can maximize their time and make the real estate experience easy instead of as hard as it is today.

Matthew Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Supernova Partners Acquisition Company, Inc. Stock Quote
Supernova Partners Acquisition Company, Inc.

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