Monday, February 10, 2020 / by Vanessa Saunders
We wrote last week about how iBuyers like OpenDoor, Zillow Offers, Offerpad and Knock are threatening the existence of buyer agents. Judging from the response, it rattled a few cages. Realtors are slowly waking up to the presence of iBuyers as the concept spreads out across the country. But iBuyers are facing a few problems of their own which should be noted.
An iByer is a company or investor which uses Automated Valuation Models (AVMs) to make instant offers on homes. It allows sellers to close on a property quickly. Once sold, the company then turns around and resells the home, hopefully at a profit.
Their model simplifies the buying and selling of homes to a retail formula. Instead of Realtors acting as go-betweens, matchmakers for buyers and sellers who skim a little off the top, iBuyers are becoming home retailers - buying wholesale and selling (hopefully) at a profit. A six to 12 percent fee cu ...