Selling a home is a major financial decision, with a lot of uncertainty and stress involved every step of the way. There’s no doubt that agents provide local knowledge and expertise for customers who want the support. According to the National Association of REALTORS® (NAR), 91% percent of sellers chose to sell with an agent in 2018, and 69% of sellers would use their same agent again.
So why do agents keep hearing about iBuyers?
Although a relatively new model, iBuyers currently represent a growing percentage of real estate transactions and are a topic of conversation among agent communities nationwide in a constantly evolving market.
We caught up with Nima Khanghahi, Agent Growth Manager at Opendoor to learn more.
Why iBuyers?
NK: iBuyers provide convenience and certainty to consumers who are looking to sell a home, buy the home of their dreams, and move on to the next chapter of their lives.
Ultimately iBuyers aren’t here to upend the industry, but to help it evolve. At the end of the day, they share the same goal as agents: to find the best solution to serve the needs of all parties involved. And when it comes to presenting an agent’s clients with choice and guiding them towards the best decision to meet their needs, iBuyers can be a powerful tool for agents to have in their arsenal.
Ah, so iBuying is more an option that an agent can offer their client.
NK: Absolutely. For agents who aren’t as familiar with the iBuyer model, here are five important points to know:
1. iBuyers can benefit all types of client needs
A good place for agents to start is to understand when the iBuying model can serve their clients’ needs. Some of the most applicable scenarios include:
- Sellers who want to move quickly or align their sale with a home purchase
- Contingent buyers looking to be competitive in a hot real estate market
- Sellers who want to avoid the risk of a buyer’s financing falling through
- Sellers who want to skip the hassle of home prep and inconvenient showings
- Sellers looking for a free, no-obligation 3rd party opinion on their home value
2. iBuyers are not home flippers
iBuyers are often mistaken for home flippers, but the model is fundamentally different. While every iBuyer varies, most companies tend to buy mid-priced, residential homes that are in good condition. Unlike a home flipper, their goal is to make minor repairs necessary for any resale, rather than targeting distressed properties that need major rehabs.
3. iBuyers provide fair market offers
There’s been some talk in the industry that iBuyers purchase homes below market value, and that consumers aren’t getting a good deal when they sell to an iBuyer. While most iBuyers do charge a fee that’s slightly higher than a typical real estate commission, a recent study from real estate tech expert Mike DelPrete found that iBuyers are offering fair market value for the homes they purchase—with a median discount to market value of around 1.3 percent. And while selling a home on the open market may yield a higher sale price, the net cash proceeds to the seller are often offset by renovation costs and the likelihood of double moves or even double mortgages. Sometimes the convenience, simplicity and certainty a cash offer provides may better suit a seller’s specific needs.
4. iBuyers employ REALTORS®
Some agents may not know that iBuyers employ licensed agents and that they are REALTOR® members. iBuyer brokerages can be part of multiple state and local REALTOR® associations and are NAR members. These brokerage members participate in association committees and are contributors to REALTORS® Political Action Committee (RPAC) Major Investors. Additionally, these brokerages utilize the services of many MLSs across the nation to market their homes.
5. iBuyers want to work with agents
Many iBuyers recognize that consumers often seek agents who can provide full-service guidance, local expertise, or negotiation skills. While every iBuyer differs in their approach to working with agents, here’s a few examples of what collaboration might look like.
- Request a cash offer for your seller client: Anything a listing agent can do to bring sellers more offers is good for everyone involved—whether the property ends up being sold to the iBuyer or listed on the MLS.
- Refer an unrepresented seller: Some iBuyer brokerages pay a referral fee to agents who refer an unrepresented seller to their buyer—think of this like a broker-to-broker referral.
- Represent a buyer: Earn a competitive commission when your client purchases an iBuyer-owned home.
- Get high-intent referrals: Qualify to get exclusive referrals from the iBuyer’s brokerages, and pay a referral fee only when the deal closes.
As the industry continues to evolve, agents can leverage iBuyers as a valuable resource in their toolkit — from helping customers better understand the value of their home, to giving them more options for moving onto their next life chapter.
