Smaller real estate firms enter the iBuyer competition
DENVER – May 2, 2019 – More real estate companies are jumping into iBuying with their own programs to compete against the Wall Street-backed "instant offer" giants such as Opendoor, Offerpad and others.
Last week, Keller Williams announced its plans to launch an iBuying service this month called Keller Offers. This week, a Colorado-based real estate brokerage is launching a local iBuyer program to compete against national iBuyers.
8z Real Estate, a Colorado brokerage with 15 offices, is launching 8z Offers to provide a cash instant-offer service to home sellers in Colorado areas that it covers, including Colorado Springs, Denver, Boulder, Fort Collins and Greeley. Like national iBuyer firms, homeowners using 8z Offers can get a quick cash offer on their home and bypass the traditional listing process on the open market. An iBuyer program allows homeowners to avoid the stress of listing a property and a chance to sell it quickly, even if they wonder whether they could get a bit more for the listing using the traditional selling route.
8z Real Estate says its instant offers are competitive, fair-market value prices. The firm also says it will make instant offers on more expensive and older homes that national iBuyers usually won't.
The median price of homes purchased by iBuyers is $240,000; 8z Real Estate says it will consider making instant offers on homes worth more than $600,000.
iBuying transactions represented only 0.2 percent of home sales nationally in 2018, or about 25,000 transactions, according to an iBuying report produced by real estate tech strategist Mike DelPrete. But the firms are growing fast. In Phoenix, for example, iBuyers comprise 6 percent of the market share of sold homes.
Brokerages join iBuyer trend with their own spin
8z says it has a multimillion-dollar iBuyer fund to hold multiple properties at one time and has completed more than 50 offers on Colorado homes. Its first instant-offer purchase closed in April.
"Like the other major iBuyers, 8z Offers is making fair-market value offers," says Lane Hornung, founder of 8z Real Estate. "Even still, the vast majority of homeowners are choosing to list with an 8z real estate agent on the open market in order to maximize their sales price and proceeds they pocket."
8z has partnered with zavvie, an instant-offer aggregator, for its program. The program allows the homeowner to view side-by-side comparisons of working with a real estate agent to sell their home on the open market versus going an instant offer route, whether through 8z's local program or a national iBuyer.
"Most homeowners think all instant offers are the same, but they're not," says Ryan Carter, president of 8z Real Estate. "Most homes are not even eligible for an instant offer."
Last year, Coldwell Banker began piloting its own iBuyer program in Dallas, Atlanta and Tampa. They teamed with cataLIST, a subsidiary of Home Partners of America, to offer homeowners instant cash offers on their home. Real estate agents serve as the adviser in either the cash offer or the traditional selling option.
Source: "Colorado-Based Brokerage Launches iBuyer to Compete With National iBuyers," Real Trends (April 2019)
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