First things first. What’s an iBuyer?
An iBuyer is a company that buys homes for cash, typically in As-Is condition, with the intent to either hold and keep them as a rental or to flip and resale them at a profit. There are a few large national companies that do this and there are also several local and regional companies. Some function as investment holdings for hedge funds and others serve REITs (real estate investment trust companies). Others are simply for-profit companies.
You may have heard that Zillow got out of the home buying and selling business. Their announcement rocked the iBuyer (or instant buyer) community late in 2021, but many of us knew that Zillow’s numbers hadn’t been adding up for some time.
Zillow got into iBuying because they thought they had a winning formula, literally. They relied on years of market data that informed their “Zestimate” to predict housing prices and the market’s movement. Unfortunately for them, the volatility of the COVID housing market, combined with bad data and poor choices, meant Zillow was the first big player in iBuying to fold up its tent and go home.
While Zillow’s efforts were ultimately a bust, many of their competitors are still thriving, even in this market, and we predict they will continue to do so. If these companies aren’t going anywhere, we need to be prepared to handle transactions with them for our buyers and sellers, so I spent some time this winter getting my iRep RealEstatePro certification.
What that means, essentially, is that we can now offer our sellers more options up front. The pros of selling to an iBuyer – convenience, quick sale, no showings – won’t be right for every seller, but they are for some. Along with those pros are a few cons, with lower average sales price being chief among them.
When a seller is interested in seeing instant offers, our process is fairly simple. I’ll schedule an appointment and come out to view the home and take some pictures of elements the ibuyers will be interested in when offering. We will gather a few docs that allow us to solicit offers on your behalf. We will approach iBuying companies like Opendoor and its competitors, but we will also approach a number of investment groups that manage rentals and bundle them like traditional investment products. I’ll also prepare a Comparative Market Analysis for your area so you can see what price you can expect to sell for if you go to market conventionally.
After a few days, we’ll sit down and go over the details of the offers, and talk about options. My goal isn’t to convince you of the benefits of one or the other, but rather to show you all available opportunities so you can make your own decision.
In many (if not most) cases, you’ll see significantly more money from a traditional sale. For some, though, the convenience and speed of the transaction may make a difference. If you’d like to talk about your options for selling your home, we’d love to chat.