Ignoring This 2021 Real Estate Trend Will Cost You MoneyFeb 07, 2022
While some real estate agents around the country are buzzing post the dissolution of Zillow Offers, the pivot is, unfortunately for them, not a sign of systemic iBuyer weakness or a fallout in technology-based pricing methodologies but rather indicative of a turning point for mega investors and how they approach real estate. Data recently released by real estate tech strategist Mike DelPrete provides predictive direction for the future of iBuyers, one that points solidly at growth. In 2021, iBuyers and institutions snapped up homes at record rates. Thankfully, as real estate agents, our success isn’t attached to the success or failure of the iBuying industry, but this trending growth does require that we learn to pivot.
iBuyers Showed Explosive Q3 Growth
DelPrete's recent report is a data-rich, visual display of the impact of iBuyers on market share in 2021. He reports that the year was a "transformative and record-breaking year for iBuyers," with more houses bought and sold by iBuyers than ever before.
iBuyer-driven home purchases took off starting in Q2, but at no time was the growth more explosive than in Q3FY21. Q3’s record-breaking performance delivered QOQ growth of +.5%, tripling the totals of FY19. In isolated metro markets, such as Phoenix, the increase was even more significant, with iBuyers accounting for over 10% market share.
iBuyer Purchases and Shares
There's no denying the fact that the market share held by iBuyers is still a small percentage of total share, but what's noteworthy is that iBuyers are finally delivering the level of growth they've been talking about since inception. When we look at the growth in combination with data related to the number of purchases and sales, the potential for real estate agents is clear.
According to DelPrete, iBuyers snapped up around 70,000 homes in 2021—that's hundreds of millions of dollars in commission potential. Increasing home prices and an intense housing shortage have created a unique opportunity for agents, institutional buyers, and iBuyers to adopt more profitable models, leading us back to an important question: How do we, as real estate agents, pivot our businesses to maximize income while also providing better service to our clients?
A Pivotal Approach to Buying and Selling Real Estate
We’ve pivoted through the technology boom, market crashes, and COVID, and now it’s time to shift again. iBuyers snapped up a fair share of real estate in 2021, but so did the broader investor base. Investor purchases of real estate accounted for 26% of all home purchases in Q3FY21. If you want to become the go-to agent within this budding niche, I have two tips to leave you with.
- Consider yourself a solution finder. The more options you bring to the table when working with buyers and sellers, the more credibility you gain. We can't hide the fact that we are working in a market flooded by investors, consumers are wise to this fact, and when you open the door and present all possibilities to your clients, your credibility goes up. After all, data is currency, and data is something you can provide to your clients right now.
- Learn the language of iBuyers and investors. As the saying goes, you can’t walk the walk if you can’t talk the talk. While working with iBuyers may be a relatively new concept to many agents, we've been doing it for years and doing so successfully. The iReal Estate Pro Certification course provides access to educational videos, tips, assistive technology, templates, and more. We also have an incredible community inside a closed Facebook group where agents share best practices from across the country.