In 2018, 9.6% of residential properties were sold to iBuyers. It shows a steady increase from 3.9% in 2016 and 6.6% in 2017. The face of consumerism has been changing exponentially over the past years. While people’s needs and wants remain the same, the manner from which they acquire these things have shifted. The closure of major department stores across the nation has been attributed to the increase in popularity of online shopping. When people want food, they don’t have to go to a restaurant; they can simply order via online apps such as Postmates or Grubhub. Travel agencies have seen a decline since the appearance of sites such as Trivago and Orbitz.com.
Real Estate is no different. Innovators have been finding ways to make it easier for the consumer to find a ‘one-stop shop’ for all things Real Estate: thus the emergence of iBuyers.
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What are iBuyers?
iBuyers offer what many of the apps and sites mentioned above offer: convenience. An iBuyer is a company that leverages technology to make offers and purchase homes instantly, directly from the seller. They aim to bypass the need for a realtor or broker by offering to purchase the house and taking on the burden of the tedious listing and sale process. Sellers don’t have to pay an agent, list the home, stage it, market it, or even show it to potential buyers. Instead, they tell the iBuyer about the property — things like its age, condition, zip code, etc. — and using data and mathematical algorithms, the iBuyer predicts the home’s future value. Currently, different iBuyers’ operations vary, but the bottom line for all of them is that they want to make the process simpler for their consumers.
Are traditional Real Estate Businesses in Trouble?
For now, the answer is no. While there may be a concern that iBuyers will take over the Real Estate industry, iBuyers are not foolproof. Initially, the idea of faster sales and less legwork may appeal to many; however; iBuyers still have significant flaws and areas for improvement. 9 out of 10 consumers ultimately pass-up offers from iBuyers. This is due to the fact that despite their promises of virtually painless transactions, iBuyers offers will still be significantly lower than that of a traditional sale. Furthermore, the availability of iBuyers is not yet wide-spread and is still quite limited. It should also be taken into account that iBuyers are quite selective about the homes they purchase, and many are not eligible due to their criteria of the home’s state, appearance, etc.
iBuyers still lack one crucial feature that only you can offer: a customized experience and a personal connection. Even though iBuyers have aggressively been advertising their services and appear to have all the shiny bells and whistles, at the end of the day, the consumer is but an algorithm, and that can make all the difference in their decisions. iBuyers should not be ignored and focusing on strategies within your business that will be able to supersede what an iBuyer can offer should be taken into account.