“iBuyers” Take Over the U.S. Housing Market

Digital home-buying platforms like Opendoor and Zillow Offers are ramping up home-buying across the country.

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“iBuyers” take over the U.S. housing market


Future. Digital home-buying platforms like Opendoor and Zillow Offers are ramping up home-buying across the country, giving sellers a “one-click” option to list and sell a home. If the iBuying market grows as these platforms expect, you may be able to sell your home and buy your next one all on one platform.

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You may buy your next house from an app.

  • iBuyers like Opendoor, Zillow Offers, and Rocket Homes offer platforms that make it easier to list, sell, and make a return on their property.
  • iBuyers usually look for “mid-level homes in decent condition,” pay cash upfront, make an average of $10K in repairs, and put it back on the market for more.
  • They then charge the owners a fee for its services — typically 5-8%.

To date, iBuyers have raised hundreds of millions of dollars to step up home purchases, even though it’s losing them money in the short-term. iBuyers are banking on that to change soon, though — Zillow expects to make around $1.5 billion from its Offers division next quarter.

The residential real estate market is worth $36 trillion, averaging 5-6 million homes sold a year. iBuyers only expect to capture only a fraction of it… but that’s more than enough. Former Zillow exec Greg Schwartz, who now runs homebuying fintech startup Tomo, said, “If only 500,000 of them sell through iBuying, it’s a massive, massive opportunity.”

Zillow and other iBuyers want to make it more convenient for people to sell their home and move on their schedule — not the buyer’s — so customers can “let Zillow handle things while I go live my life.” That’s why iBuyers collect convenience fees, rather than position themselves as home flippers (though they do that too).

For a rising generation of digitally fluent homeowners, that convenience may be well worth the price.

David Vendrell

Born and raised a stone’s-throw away from the Everglades, David left the Florida swamp for the California desert. Over-caffeinated, he stares at his computer too long either writing the TFP newsletter or screenplays. He is repped by Anonymous Content.


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