If you had told me, when I started in real estate over 20 years ago, that one day I would be selling over 50 homes through my own iBuyer platform, I would have told you you were crazy.
But times have changed. Today, you can buy almost anything with just one click and have it delivered in less than 24 hours. Comfort is king!
In a climate governed by “I want it now” expectations, it makes sense to meet your clients where they are and let them sell and buy their home (mostly) on their own terms and timelines. And that means either establishing your own iBuying platform or creating a third-party route to iBuying.
I know what you’re thinking: iBuy? You haven’t heard of what happened to Zillow!? Yes I heard. The truth is this: iBuying for a traditional brokerage or team is a whole different animal. It’s not about using a computer to price houses.
I’m talking about an iBuying program that keeps agents at the center and ultimately benefits the consumer – not necessarily with the highest market value final sale price, but with the highest possible level of convenience. Today’s consumer is all about options.
If you want to future-proof your business, you can’t keep your head in the sand on this one. Had we ignored iBuying’s pandemic-friendly opportunity, we would have literally missed millions in team sales volume over the past year.
If you open your mind, you can turn the entire process of iBuying into a pipeline building opportunity and an inventory machine. Here are four reasons your brokerage or team needs an iBuyer solution – either custom-built or out-of-the-box.
No. 1: The comfort card
Although we have always offered our customers the option of a “guaranteed offer”, we realized at the height of the pandemic in 2020 – when consumer fears of strangers wandering into their homes reached an all-time high – that we needed a one-click system to give customers easy instant deals.
So we’ve set up a simple digital journey to allow customers to explore the option without any pressure. Owners can now simply put their address on our site and receive an offer from us within 24 hours.
Suddenly, our “If we can’t sell your house, we’ll buy it” mantra had been turned upside down, especially in a seller’s market where homeowners saw how quickly homes were selling – and for how much. “Do we even need an agent to sell?” some wondered.
But then we came in, playing the convenience card: “How would you like to sell your house without any viewings, a locked closing date of your choice and the guarantee of a full cash offer – so you can go buy your next home?You won’t have to move the kids or pets for open houses, keep things spotless, or leave your home office all the time while you’re trying to work from home.
Of course, some sellers said yes, even though we explained to them that they wouldn’t necessarily sell their home for the same price as putting their home on the traditional open market. They wanted that convenience and, during COVID, that feeling of germ safety.
With iBuying, sellers also save on staging and preparation costs that are typically required for marketing. They can also maintain their privacy because digital photos and videos of their homes do not need to be posted publicly.
When presented with the idea of iBuying, some sellers turned it down. But iBuying kicked them out. Then they saw our innovative, low-pressure way of doing things and trusted us enough to sell with us using the traditional route. Win-win.
No. 2: Cash collateral
Finally, a third and much larger group of sellers would have preferred the traditional route but needed money to close their next home. In a hyper-competitive market full of bidding wars, cash is king.
We expect this trend to continue through 2022. In fact, this is where we’re seeing the strongest growth in iBuying – sellers looking for a more aggressive buying strategy. It is worth noting that about a third of households sold in the United States in the first quarter of 2021 were full cash offers.
The real key with iBuying is cash flow stability. I’ve seen more deals fall this year than I’ve ever seen in my life, even in this strong multiple-deal market. Buyers lose their jobs. Buyer incomes change. People catch COVID in their family and have to retreat.
In one instance, we had a client whose home sale failed and subsequently jeopardized their next home purchase. We offered to buy the house through our iBuyer platform and he quickly got going with a guaranteed closing date with cash and a clear way to get his next home for his family – all at record interest rates, of course.
No. 3: ‘The real estate Amazon’
Part of the reason Zillow failed in its iBuying push — at least this time — is that the organization didn’t have enough edge real estate connections. They missed the mark by not knowing the nuances of local markets, which we know as agents.
Traditional brokerages and teams like ours have a team of agents on the ground, but they also have those relationships that Zillow can’t seem to extend – tight ties to mortgage options, titles, valuations , moving companies and property management services.
Future real estate teams who want to thrive, not just survive, during the digital revolution will offer a suite of services with the goal of becoming “the Amazon of real estate” managing every part of the process, so consumers don’t have to to stress and work so hard to get the job done. iBuying is definitely one of them. Today we have integrated our iBuying option into our listing layouts.
#4: The power of pricing
With our iBuying program, we decide home value based on local market data and local market expertise – not AVMs (automated valuation models). Our iBuyer prices are not necessarily set at a firm markup or a certain percentage below market value.
We determine iBuyer values on a case-by-case basis. We’re not going to lose money on a deal, but we’re going to be smart about our deals, so our customers feel treated fairly and tell their friends we’re worth hiring because we can do it all..
Sometimes when we evaluate these individual offers, we have found that it can create a domino effect of up to five transactions when working with clients on both sides of the buy and sell side.
After we acquire homes, we usually renovate them and resell them or, because we have a property management division, we can turn them into rentals. And it’s also a game-changer: especially now that there are record numbers of units on the market for rent and/or sale, iBuying is a way to literally build your own inventory.
DIY or ready to use?
If creating your own iBuying program seems too daunting, there are other third-party solutions, such as Zavviean iBuyer deal aggregator that facilitates instant deals, bridging loans, and other avenues for consumers to use their own agents.
Zavvie, the brainchild of Lane Hornung, a broker owner of 8z Real Estate in Colorado, and Returnanother umbrella service, both pledge to keep agents “deal-centric” – aka “on commission” – while offering more modern buying and selling options.
Consumers will continue to seek more and more different avenues for real estate. RedfinNow, Opendoor, Offerpad and other national iBuyers are not going away. Why claim part of the action – rather than being eliminated altogether? Your customers will thank you.
Brandon Brittingham is the CEO and Team Leader of the Maryland & Delaware Group of Long & Foster Real Estate in Salisbury, Maryland. Connect with him on Facebook or Instagram.