With all of the iBuyer hype from OpenDoor, Zillow, Perch, Knock, Orchard, Redfin, real estate agents may be feeling a bit of heat. But, rather than shying away from the competitors, why not use it to your advantage like a Jedi master?
Just like the Zestimate, iBuyers present a unique opportunity for agents to craft strong sales pitches around the inefficiency of iBuyers, and the importance of working with someone that they trust to get them the highest price for their home sale.
But, the first step is knowing iBuyers inside and out, to be able to educate your clients on why the iBuyer choice isn't necessarily the smartest one. And before we start bashing them, we should probably note why they may be a great choice for some...
1) Will Buy Homes For Cash Fast (With No Contingencies)
2) Can forgo repairs, staging, And showing (Less Time, Energy, And Effort)
3) Expedited Closing (Short Time To Cash In Hand)
However, often the reality is not what it seems...
If you missed our webinar on learning how to use iBuyers and instant offers to your advantage, you can read some of the highlights, below.
1) iBuyers Are More Expensive
If your clients push back on a 6% fee, just wait until they see 7% - 7.5% fees that the iBuyers charge.
2 ) Traditional Sale = More Money
Testing the open market will almost guarantee a higher selling price. When there's an open market, there are more potential buyers and more competition. However, if there are known issues with the home, the iBuyer may be the way to go to avoid costly diligence and inspection contingencies (which is often the case).
3) iBuyers Close Quickly And With Less Hassle
Have a house that's beyond staging or repair? It may be worth taking the 1% referral fee and sending it to the iBuyer, after all. Your clients won't have to worry about making the home presentable, though they'll likely have to deal with a number of diligence items and repairs, prior to close.
4) The iBuyer Can Be A Saftey Net Or Stalking Horse
The only thing you need is to get your foot in the door - why not test the open market and see what you can get for the home. If it doesn't sell, the iBuyer will still be there with a high-fee, low-ball offer.
5) The iBuyer Process Can Be Disjointed
With all of the technology in place, sometimes the process is actually more difficult when you just need someone to talk to... Many sellers prefer the comfort of having someone on their side that's been there and done it before.
6) Use iBuyers As An Excuse To Meet Developers and Wholesalers
You can most certainly offer the same "buy all-cash" deal that an iBuyer can with a traditional buyer. It's often worth approaching local investors to see if they are interested in buying distressed assets that are not exactly right for the open market. This will help you win on the buy-side and the sell-side.
7) Use The iBuyer To Open The Door
Chances are that most sellers aren't even aware of iBuyers in their market. Educating them on the option just may win some points in the eyes of the owner.
So, what is the reality?
At the end of the day, iBuyers certainly have their place in the market, but owners will always opt for service, value, and the fear of missing out on a higher sales price, as long as they're not under any sort of financial or time duress.
If you find yourself coming up against an iBuyer in your market, make sure you know the in's and out's, and you just may be able to use some Jedi mind-tricks to educate your seller as to why iBuying isn't always the best option.