What is an iBuyer? Instant Buyers, Explained



From a seller’s perspective, iBuyers may be the best opportunity to sell a property quickly and get paid in full. However, retail buyers cannot compete with these companies as most don’t have the funds to buy a home with all their money. This has raised concerns about the existence of market manipulation.

What is an iBuyer?

Instant Buyers, also known as “iBuyers,” are real estate companies that use technology to buy and sell homes almost instantly. Using what are called cash offers, iBuyers can buy homes at full price, using all cash and no mortgages or other financing. This can make selling a home a lot easier than going through the traditional route.

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In many cases, you don’t have to list your home or pay any commission or other fees that are regularly associated with selling a home. IBuyers tend to charge a fee of around five percent of the sale, and this is one of the very few fees associated with these transactions.

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When an iBuyer buys a home, they manage the listing, as well as all the tasks that a retail salesperson or real estate agent would normally have. The Zillow, Opendoor, Keller Offers, Offerpad and RedfinNow offers are among the most popular iBuyers on the market.

With Zillow, Keller Williams, and Redfin all having their own iBuyer platforms, some suggest these companies have an unfair advantage over potential retail home buyers. These suggestions are correct because Keller Williams and Redfin are two of the leading real estate companies in the United States, and Zillow is the world’s leading real estate website. It would be very difficult for a first time home buyer to compete with this.

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How iBuyers affected the real estate market

In Phoenix, Arizona, the iBuyers were would have buying homes regularly, and native residents complain that these companies buy and resell these properties at a much higher price. Maricopa County sensed iBuyers’ presence as one of them bought a house in a gated community for $ 100,000 more than neighboring houses. According to AZFamily, the home was overbought for $ 600,000, and purchases like these can contribute to market manipulation.

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While market manipulation is often associated with the stock market, it can also occur in real estate. When an iBuyer or real estate company purchases a property for a price significantly higher than its actual estimated value, it gives retail buyers the assumption that the property is actually worth that price.

This type of practice can even be done more malicious if the company buys the house at an inflated price, then hides cheaper houses in its area. This type of practice is illegal but there are some who claim that it is still practiced today. Accused of these practices, Zillow argued in a declaration that if “we pay too much, we will lose money on the resale.” If we bid too low, the owners won’t use us.


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