iBuyers are here to stay. A "Seller Preference Report" created by Zavvie found that the acceptance rate for iBuyer offers increased 6.1% in Q4 2020. Even in this hot market, sellers are turning to iBuyers. Why? I believe there are five reasons why sellers choose iBuyers, and they all boil down to convenience.
Timing, timing, timing may not replace the traditional location, location, location mantra, but it's a critical factor. No one wants to move twice. Sellers don’t want to sell until they've found a house to buy, and they don't want to buy until they've sold their house. It's a Catch-22. So, what’s a REALTOR to do?
REALTORS can call on iBuyers. iBuyers can help. They are prepared to address the pain of timing a move by offering flexible close dates as well as quick, cash closings. As a result, there's no negotiating with a buyer, sitting on the market, or worrying about contingencies ruining a deal.
Instead, your seller selects a closing date that works for them. Zillow, for example, can offer flexible close dates that fall within a 7-90 day range. Your seller could theoretically go from deciding to use an iBuyer to cash in hand in a little over a week.
Preparing a home to sell isn't just a matter of making sure the house is "clean," it needs to be immaculate to maximize value and reduce time on the market. As quoted by cleveland.com,
"Only 10 percent of homeowners keep a house as clean as it needs to be when showing it to potential homebuyers."
Kids, pets, and everyday messes all need to be hidden before every showing and open house. It's a headache. And staging? It's an expense. When using an iBuyer, your seller eliminates the hassle of the staging-cleaning-showing cycle. While it’s always a good idea to ask your seller to put their best foot forward, iBuyers are not concerned about the cosmetic condition of a home. Their concern lies in the functionality of the home, but even then, they can solve for the pain created by home repairs, which brings us to point number three.
Statistically speaking, home inspections can kill deals. Negotiating or performing repairs to a buyer's satisfaction are critical elements of a successful closing. For some sellers, repairs can be a major stress point. For others, repairs aren't physically or financially feasible, and buyers aren't always willing to accept an at closing credit for repairs.
When an iBuyer contracts on a home, it offers to take on the burden of repair. Most will send a local estimator to your seller's home to confirm its condition. Next, they will present your seller with the option to choose between taking on the repairs or leaving them for the iBuyer post-closing. If your seller doesn’t want to deal with repairs, they won’t have to.
According to the National Association of REALTORS (NAR), "From November 2019–January 2020, 74 percent of contracts settled on time," which means that 26% of contracts did not.
Hang with me here, I’m going to throw out a few more statistics…
NAR's May 2021 Confidence Index Survey reports that among contracted homes, 22% of closings were delayed by contingencies while 7% were terminated. The most common delays were caused by financing (21%), appraisals (26%), and a category defined as "other" (26%). Deals classified as "terminated" were most often impacted by appraisals (13%), other (11%), and home inspections (8%).
For a seller who wants a reliable closing date, an iBuyer may be their best option. While no closing is "guaranteed," an iBuyer is not going to back out in the 9th inning due to financing or appraisal concerns.
Selling a property occupied by tenants creates a unique set of challenges: Your seller has no control over cleanliness or staging. They also have less control over showing availability—not to mention the list of challenges that present themselves in a tenant-occupied home post-contract.
While iBuyers will not buy tenant-occupied homes, they do solve a lot of the headaches created by trying to sell a vacant property. If your seller is willing to wait until the tenant moves out, they can work with an iBuyer to time the closing in a way that minimizes their expense.
A quick Google search for information on selling a tenant-occupied home will yield several pages of results. I read four of them. Not one mentioned presenting the seller with the option of using an iBuyer. Being prepared will set you apart.
Modern agents present all options. Being prepared with a possible solution to the challenges sellers face will set you apart from other REALTORS during your listing presentation and position you as an industry leader.
The process of gathering all options available to your seller is not as complicated as you might expect. You can aggregate iBuyer offers on your own or use an automated tool like Donna to do it for you.
Understanding the complexities that impact sellers is never an easy task for real estate agents, but being prepared to solve potential pain points is what sets mediocre agents apart from agents who are prepared to compete in our technology-driven world. Understanding why sellers choose iBuyers is a foundational key to success. Remember, iBuyers are not here to replace you. They are here to supplement what you already bring to the table, and they want to work with you.