7 Things Real Estate Agents Should Know About iBuyers
iBuyers are the talk of the industry lately, and it’s no wonder. In just Phoenix alone, iBuyers have accounted for more than 7,600 transactions since 2017. They’re also accounting for about 10 percent of all institutional investments, too.
And they do it all without agents.
For the most part, iBuyers are designed to be a self-guided selling solution. Homeowners enter a few data points about their home, an algorithm gets to work checking appraisal district data, recent sales comps, and more, and a cash offer gets put on the table. All the seller has to do is click “yes,” and the rest is history — no “for sale” sign, no staging and no commission paid.
Should you feel threatened by this new approach to selling real estate? How can you set yourself apart from these hands-off solutions and keep local sellers in the fold? Here’s everything you need to know about iBuyers — and what they mean for your market.
1. iBuyers streamline the selling process.
The main thing to remember is that iBuyers streamline selling. They take out a lot of the hassle, and they make it more convenient, faster, and easier. Though you, as an agent, may not be able to simplify all parts of the sale, there are ways you can ease the process. Have a staging and cleaning pro on call to ease the marketing aspect, utilize text-enabled scheduling apps to make showings a breeze, and cultivate a deep network of other agents and potential buyers. All these can help ease and quicken the sales process, while still maximizing profits.
2. iBuyers often undercut sellers.
iBuyers have to make a profit when they eventually flip and sell the home, and to do so, this often means undercutting the sellers on price. Typically, a homeowner is going to get less from an iBuyer than they would on the open market (though it may take longer and it depends on local housing conditions). Stressing the added revenues a seller can earn by using your services, as well as having go-to pricing, marketing, and staging strategies that can maximize their earnings, are all great ways to set yourself apart from local iBuying options.
3. iBuyers focus on mid-tier homes.
If you’re in the luxury or high-end niche, you likely don’t have much to worry about. According to data from Inman, most iBuyers are buying and selling homes in the $200,000 to $350,000 range — not anywhere near the top of the market.
4. iBuyers big on self-guided showings.
When iBuyers put homes back on the market, they usually allow for self-guided showings via an online scheduling tool and some sort of lockbox or keypad. These play into what today’s digitally savvy, independent homebuyers are looking for and also ease the costs on the iBuyer’s end. While you may not be able to fully enable self-guided tours on your own, it doesn’t hurt to take a more hands-off approach to your showings — particularly with younger buyers. Would they like you to step outside so they can tour solo? You might also consider an online scheduling tool to add convenience.
5. iBuyers are only in some markets — mostly larger metros.
iBuyers are growing, but they’re not quite everywhere yet. For the most part, they’re only in major markets — places with lots of buying and selling activity. Think big cities like Houston, Atlanta, Phoenix, Dallas, Chicago, Las Vegas, and San Francisco. They tend to stick to highly populated areas with medium-tier home prices. They’re not really present in the Northeast just yet (though that might not be true for long).
6. iBuyers are not fee-free.
Though sellers don’t have to pay an agent commission when offloading their home to an iBuyer, there usually is some sort of fee baked in there. Offerpad, for example, charges a 7 percent service fee (higher than what most agents command in commissions!) Make sure your local sellers are aware of these fees, and consider offering some sort of commission rebate or reduction in exchange for their listing.
7. There are a lot of iBuyers.
The number of iBuyers out there is constantly on the rise. It all started with Offerpad and Opendoor, but now there’s also Bungalo Homes, Knock, Realogy, Zillow Offers, Redfin Now, and more. Individual brokerages (like Keller Williams, for example) are even starting their own iBuying programs to keep up with demand.
The Bottom Line
iBuyers may be gaining steam, but they’re not poised to dominate the market just yet. There are plenty of ways agents can set themselves apart and provide real, true value for the sellers and buyers they serve. It’s just a matter of understanding why customers are using these iBuyers in the first place.
Want more help serving your clients? Refer them to a proven mortgage lender like Embrace Home Loans. We’ll guide the way from start to finish.