What You Need To Know About iBuyers
As the ever-changing real estate market collides with technology, listing websites are adding "iBuyer" to their list of services. When coming across an "iBuyer" interested in your home, it can be tricky to understand what they are and whether or not they are the best option for you. Here is some information on iBuyers and our advice for navigating them within the real estate market.
What They Are
Most of the same websites that you search for homes on, like Zillow and Opendoor, are now including buying and selling homes in their range of services. iBuyers are home buying companies that are able to make fast offers on homes. These companies include Opendoor, OfferPad, Zillow, Redfin and more. iBuyers typically focus on homes in good condition; they want a fast buy leading the way for a fast sell in the future. The offer that they provide can come in minutes of the home being put on the market and oftentimes they place the offer without seeing the property, making their decisions based on a algorithm or valuation model.
Their Effect on the Market
Since 2018, we have seen a significant growth in iBuyer activity. There has been a 25% increase in purchases and a 51% rise in sales. However, growth since the beginning of this year has been minimal.
Given that the re-sale market has been very strong in May and June, the iBuyers have lost some market share over those 2 months. They represented 4.8% of May 2019 purchases, lower than the 4.9% they achieved in August 2018 and a lot lower than the peak of 6.9% that they achieved in December 2018. Their chosen market range is homes below $300,000, and with the way the market is currently with high demand and low supply, their opportunities are shrinking fast. iBuyers though do make up a significant amount of the current market inventory because they buy homes at a discount from sellers who need money quickly and with some upgrades are able to turn it around into a desirable product for buyers!
Interested in the status of the real estate market? Every Monday, we post a Monday Market Update on our Facebook!
Of course as a seller or buyer, you deserve the option that best serves your priorities, and going with iBuyers may support these priorities better, or maybe not.
With iBuyers there is the option of cash offers without contingencies, however these offers are often well below market value. With iBuyers though, there is the convenience of a sure close date within a timeline that you need and selling your home in as-is condition - although in the type of market they are in, getting a contract quickly and a closing at your desired time is often a reality.
If going with an iBuyer is the way for you, we can still represent you and your interests and negotiate with the iBuyers for the best deal possible. We can also provide access to additional investors who may be able to offer you a better deal for your home or position you on the open market where you're sure to garner the highest price in the shortest time the market will withstand with our expert marketing.
Have any questions on what would be the best option for you? Give us a call and we would love to talk through it with you!
What This Means for You
Do your research! Just like in any situation when selling your home, make sure you know as much as possible before making the final decision. With the prevalence of iBuyers in today’s market, there is a good chance that you will encounter one after your home. Talk with us about your thoughts, your specific wants and needs, and whether or not an iBuyer is the best option for your situation. Working with us can be helpful as we can negotiate with the iBuyers for the best deal and for your best interests or share other options that might meet your needs better.