Keller Williams Realty Biltmore Partners | Luxury International

What are iBuyers?

by Suzanne LeRose 05/09/2020

What are iBuyers?

Are you curious about what an iBuyer is and how an iBuyer works? Here is some information that may help.

iBuyers are data-driven, large-scale home purchasers who seek to maximize value.

What does iBuyer mean?

iBuyer stands for “instant buyer.” These are companies that focus on going directly to consumers and offering to buy properties, usually from off-market sellers. The most prominent examples are companies like Opendoor, Offerpad, and Zillow Offers. iBuyers are starting to work with large brokerages. Keller Williams is leading the way with Keller Offers. Keller Offers allows clients to have a fiduciary guide them through all possible options for selling their home.

Data-driven

iBuyers are data-driven. They focus on complicated algorithms to help them quickly and accurately make offers on houses. There is a sweet spot in making offers on houses. If the offer price is too low, sellers won’t accept the offer. Without accepted offers, iBuyers won’t be able to fully utilize their investment resources. If the offer is too high, iBuyers won’t be able to cover some of the risk they take on with potential repairs, holding costs, and market fluctuations. Where iBuyers focus geographically and how precisely they make an offer is key to their growth.

Large-scale

iBuyers are large-scale. They make offers on thousands of houses. This is important for several reasons. First, the more houses they research and on which they make offers, the more precise their data becomes. Second, the larger they grow, the more they can spread out costs and increase their margin per house. Finally, as they grow larger, they are better able to spread out risk and balance out any properties that they mis-valued or that had surprise costs.

Home Purchasers

At their core, iBuyers are home purchasers. They aren’t the first or only ones on the scene to go directly to consumers. If you have seen signs by the road that say, “I buy houses,” or seen billboards for We Buy Ugly Houses franchises, you’ve already run across plenty of cash buyers. These tend to be smaller scale, local buyers. There are large-scale, institutional level buyers as well. Many real estate funds and similar organizations buy houses at high rates. They just don’t tend to advertise directly like iBuyers. iBuyers are unique in that they go directly to consumers en masse.

Maximize Value

iBuyers seek to maximize value. This means they want to precisely offer on houses and optimize the proceeds from each house. They also provide connections to additional services, like mortgage, insurance, and title, so that sellers can have a one stop shop for their real estate needs. For Keller Offers, these services include the use of Keller Mortgage and Keller Covered. These services with Keller Williams Realty allow KW Agents to utilize all of the tools within their ecosystem to serve their clients.

That’s a quick overview of iBuyers. They are not all created equally—they vary in the strength of their pricing models and where they are focused geographically. To maximize your success, the best option is to connect with a KOCiB, Keller Offers Certified iBuyer agent who can walk you through all your different options. You should always have a fiduciary agent on your side.

Call me if you have any questions.

About the Author
Author

Suzanne LeRose

Hi, I'm Suzanne LeRose and I'd love to assist you. Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. I'd be honored to put my real estate experience to work for you.