iBuyers upping offers as housing market rises
Bids now at 104% of market value
Trust for iBuyers is not the only thing rising in the industry, as the prices they are offering for homes is also surging.
A new report from real estate technology company zavvie on iBuying transactions over the first half of 2021 found that offers from iBuyers were on average 104.1 percent of market value, according to Inman. That’s a marked increase from 2020, when iBuyers offers were coming in at 97.6 percent.
Offerpad, Opendoor, Zillow Offers and Redfin Now were included in the report.
iBuyers have also been dropping fees over the past year. In 2020, the charges were around 7.2 percent, on average. This year they averaging 5.1 percent. With concession charges for repairs dropping as well, the consumer cost of selling to an iBuyer has been reduced by almost 35 percent.
The changes are likely linked to the hot housing market, which left a shrinking inventory of homes available for buyers and prompted bidding wars. Aggressive offers have been increasingly necessary to secure homes.
But iBuyers do have a tailwind. A separate survey of homeowners found 82 percent responded at least somewhat positively to an iBuyer pitch.
Redfin reported that just 0.5 percent of home sales in the first quarter of 2021 were through iBuyers. Improving sentiment and an increase in offers bodes well for the industry, though.
[Inman] — Holden Walter-Warner