It is a big day for iBuyers: the top iBuyers purchased one out of every 100 homes sold in 2019. This figure may not sound like a lot, but the one percent market share is nearly double where it stood at the same time in 2018. With iBuyers such as Zillow Offers expanding their efforts and adding new markets, the increase makes sense, and in some cities the market share is over 5 percent. But hurdles still stand in the way of iBuyers’ success. iBuyers still need to sell—and often renovate—the houses they buy through instant offers.
The nation’s top iBuyers purchased 1 of every 100 homes that sold in 2019 across the more than 200 U.S. metro areas Redfin tracks, nearly doubling their 2018 market share of 0.6%. That’s based on a Redfin analysis of MLS and public records data on home purchases and sales made by the most well-known national iBuyers, including Opendoor, Zillow, Offerpad and RedfinNow.
The term “iBuyer” (short for instant buyer) is used to describe real estate companies that use technology and AI to make instant offers to home sellers and then purchase homes in quick, cash transactions. iBuyers charge sellers a higher fee than a traditional real estate agent would for the convenience of avoiding home prep, showings and open houses and the certainty of a cash offer with a flexible move out day. These companies then make any necessary improvements and resell the homes to homebuyers.