Is iBuying Here to Stay?

Post-Zillow fallout In Tampa, Florida, Gary Byrd, 59, a community college campus facilities supervisor, had recently become engaged and ...

In Tampa, Florida, Gary Byrd, 59, a community college campus facilities supervisor, had recently become engaged and was looking to sell his 1,200-square-foot, three-bedroom, two-bathroom home so that ‘he could move in with his fiancee, who had a bigger house.

Mr. Byrd wanted a quick and easy transaction, and “didn’t want people walking around my house,” he said. In August, he went online and got an instant estimate from Zillow. A few weeks later, he had scheduled an in-home assessment and a Zillow employee confirmed that the company would match the online offer of $ 235,000. Zillow took a 3 percent fee and an additional $ 2,000 for minor repairs, and by October the deal was complete.

“It worked with my busy schedule,” Mr. Byrd said, “and you cut out the middleman.”

He used the proceeds to pay off his debt, invest in his 401 (k) and buy a new truck. His experience – a seamless sale, without the hassle of a conventional real estate transaction – came just weeks before Zillow’s iBuying operation disappeared.

Before its abrupt withdrawal from the iBuying market, the online real estate market was drastically eating away at the housing supply in several US cities, including Atlanta, Phoenix and Dallas. But Zillow was facing massive losses and has since admitted he was wrong in forecasting prices, bidding too high and failing to adjust to the cooling of the housing market. He is now working to unload thousands of homes to institutional tenants.

This seems to be a warning about the dangers of investing in iBuying. Nonetheless, representatives from Opendoor and Offerpad said they are stepping up their own iBuying efforts.

Conventional brokers are keeping a close eye on iBuyers and some are responding by rolling out their own versions of the service. Keller Williams, for example, has Keller offers. And there are sites like Quick purchase that allow brokers to offer clients services that mimic those of iBuying.

But while iBuying has thrived in big cities, particularly the Sun Belt, it has yet to gain a foothold in smaller towns, especially among the more affluent shoppers.

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Newsrust - US Top News: Is iBuying Here to Stay?
Is iBuying Here to Stay?
Newsrust - US Top News
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