Real estate has a welcomed history of change to make the process of buying and selling homes easier. From the creation of the MLS to the launch of Google Maps, shopping for real estate has been an ever-changing experience. You have probably heard the relatively new term “iBuyer”, but what exactly does that mean?
Simply defined, iBuyers are investors that quickly offer homeowners cash, then close on the home and resell the home – typically after making minor repairs. Examples of iBuyers are Opendoor, Zillow Offers, OfferPad and Knock – to name a few. The goal of iBuyers is to resell homes quickly, making as much profit as possible. This turnaround may sound familiar, similar to those companies who “buy ugly houses”, with a message typically hand-written on a flimsy street sign. The difference with iBuyers is of course the digital aspect, and the fact that most of these companies are backed by financial investors which allows for heavy volume. Also, iBuyers prefer homes that need minor updates, such as interior paint, carpet or landscaping – not a total home flip.
So what should you know about iBuyers? While some of the iBuyers say that they can service all price points, overall iBuyers tend to focus on houses below $300,000 and houses that are relatively new. The reason being, iBuyers are not setup to take on homes with a lot of costly repairs needed and the business model seems to market towards clientele that aren’t in the luxury sector.
With the constantly evolving landscape of real estate, it’s important to get the full picture of the vast solutions available today. iBuyers offer a quick solution for the home buying process, but when it comes to understanding the local market and talking with a real estate professional – iBuyers aren’t going to be your answer.