Understand your importance in the real estate process and find out how to make the iBuyer model work for you. Despite some disruption during the early days of COVID-19 shutdowns, the iBuyer model represents a growing segment of the real...
Despite some disruption during the early days of COVID-19 shutdowns, the iBuyer model represents a growing segment of the real estate market. In Q2 2021, iBuyers represented a one percent market share, with 15,000 homes sold for $5.3 billion, according to a recent report by Zillow.
Like many other technological breakthroughs, the advent of the iBuyer model brought with it fears of industry disruption and a retreat from the human-centered service model that real estate agents strive to deliver. However, the reality is somewhat more complicated. While iBuyer services offer additional convenience to both buyers and sellers, these are generally outweighed by the benefits of a more personal, human approach.
What would you do with an extra 16 hours?
Spend more time on the things that matter most.
In many ways, the unique value proposition (UVP) offered by an iBuyer service is not new. Most promise a quick turnaround of 24-48 hours for an initial offer, removing much of the uncertainty and ambiguity associated with a traditional market sale. In addition, iBuyers generally buy without the need for extensive repair lists, home staging, and long waits for offers from interested buyers.
This is a similar service to that provided by many traditional real estate investors, and the seller appeal and overall business model is similar for both. This suggests that iBuyers may not be taking a bite out of the traditional market for most listing agents. They’re simply using their data-gathering capabilities to target those homeowners who would have likely sold to and through an investor.
Here’s how to make the potential of iBuyers work for you:
While iBuyers offer some advantages, they are nothing compared to the advantages of working with a well-qualified, knowledgeable real estate agent. These include:
It’s not enough for you to know the value you bring to the real estate transaction. You must clearly communicate your UVP so that sellers in your market understand what you offer — and how it translates into a higher sale price for them. Whether you send out emails to your SOI, send mailers to your geographic farm, write a blog, host a podcast, or make videos about your local market, getting the word out is an important part of raising your profile in the communities you serve.
In addition, by staying in touch with your past clients, you can nurture an important source of referrals and recommendations. Let them know that you are always there for their family and friends and let positive word of mouth help you grow your business.
One of the reasons that iBuying isn’t for everyone is the reduced sale price they generally offer. This price is normally well below that which could be captured on the open market. Don’t be afraid to let your clients entertain an offer from an iBuyer, then show them the comparable values of properties in the area. They will probably find that a traditional sale makes far more financial sense and offers a much greater return on their home investment.
By contrast, there are times when an iBuyer just makes sense for your sellers. Perhaps they need to relocate quickly for a new job. Maybe they need to settle an estate or finalize a divorce settlement. Perhaps they have significant equity in the home and are more interested in a quick transaction than in maximizing their profit. Listen to your sellers, and if an iBuyer makes sense in their specific situation, help them explore it as an option, comparing offers from several services if possible.
While you probably won’t earn your accustomed commission, you’ll generally earn a fee provided by the iBuyer. In addition, you’ll make a big and lasting impression on your clients by putting their needs before your own.
Compare the iBuyers that are active in your market and find ways to connect with them, and use that to your advantage. You may be able to become a partner agent or you may find ways to receive referrals from homeowners who didn’t get an offer from the iBuying service. Remember that every movement in the market offers an opportunity. Find the opportunity iBuyers are offering and figure out how to put it to work for you.
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