Instant buying (iBuying) accounts for only a small percentage of real estate transactions, but some buyers and sellers are turning to technology to avoid escrow periods and hurdles in the closing process. Companies known as iBuyers like Opendoor and Offerpad use algorithms to set home prices and buy properties directly from the owners for cash, says The New York Times.
Though iBuyers offer 0.22 percent less than fair-market value on average and charge about 1.3 percent more than a traditional listing agent, the complete transaction takes only a few days and takes the strain off of sellers. In a market that thrives on personal networking, iBuying is only reaching a small population of home flippers and investors, though some companies are quickly expanding their algorithmic home-sales divisions.
Companies known as iBuyers — the “i” stands for “instant” — are using algorithms to set home prices, muscling in on conventional brokers and promising an end to packed house tours and bidding wars. And iLenders are using technology to simplify the mortgage application process, giving buyers a leg up in an overheated market. By working directly with consumers, and eliminating banks and brokers, these companies offer a faster, more streamlined approach to buying and selling homes.
As anyone who has experienced a traditional real estate transaction will appreciate, these instant transactions can be quick and less complex. But there are drawbacks: In a sellers’ market, some homeowners may be leaving cash on the table by dealing with iBuyers. And those wary of tech or looking for a personal touch may find the experience wanting.