With a hot real estate market, some companies are looking to make a profit. iBuyers, or “instant buyers,” are scooping up properties all over the Bay Area and turning around to sell them, hoping to make a quick buck.
Zillow, perhaps the most notable firm, and other national companies like Redfin, Opendoor, and Offerpad, are boasting an easy, stress-free home-selling experience. Sound too good to be true? That’s because it is.
Here’s why to skip the Zestimate (that all-to-often undervalue your home) and talk to a local agent who can give you a better value for your property. Using our knowledge and experience will help you sell your home fast, and for top-dollar.
iBuying Trending in Tampa Bay
Online companies like Zillow are buying up houses around Tampa Bay. Through the first half of 2021, iBuyers snapped up 971 houses with a median purchase price of $276,500, according to a report by Zillow. These three companies purchased 2,500 Tampa Bay-area homes combined from 2019 through June 2021, Zillow said.
Zillow iBuying Business Model
In 2018, Zillow got into iBuying, a business where high-tech companies with deep pockets purchase homes as-is without requesting any closing costs or concessions, Realtor commissions, warranties, or any other kind of repair.
Their goal is to make minor renovations and sell for a gain (think as if them as a house flipper so to speak). iBuying companies appeal to homeowners with the promise they can sell their home without a broker or real estate agent for a cheaper, stress-free transaction.
Are you thinking of listing your home? You want to get the value right.
You want to make as much money as you can from the sale of your property.
Where the iBuying Model Fails
Companies like these rely on algorithms (in Zillow’s case, “Zestimates”) to price homes without even seeing it in person. They focus on cookie-cutter, middle-class homes with standard features. But suppose you have a complex property or a larger home than your neighbors with features like a pool, whole-house generator, or solar panels. In that case, the algorithm is simply not sophisticated enough to correctly price that home. That means money on the table for sellers in an already hot market.
Zillow Offers, the company’s iBuying division, recently announced plans to close down and lay off 25% of Zillow’s staff after selling homes for a loss. A statement from the company said, “We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility.”
“We’ve determined the unpredictability in forecasting
home prices far exceeds what we anticipated.”
– Zillow, regarding the shuttering of its iBuying division
Why It’s So Important to Use Licensed Realtors
When you sell your home with experienced, local Realtors like the Heffernan Team with Frank Albert Realty, you’ll end up making more of a profit. We use hand-picked “comps,” or comparable homes, to base the price of your home. In the industry, we call that a Comparative Market Analysis. It’s free and it helps us make sure we price your home to sell FAST. From the number of bathrooms and bedrooms to the finishes of your home and even the age of your roof, we make sure to price it right.
When a home is overpriced, it will sit on the market; even in a hot market like Tampa Bay. After a few weeks or months, the overpriced home slashes its price – and potential buyers wonder what’s wrong with the property. The house continues to sit, and the price drops more, losing valuable time and money. When your home is appropriately priced, perfectly marketed, and expertly managed throughout the listing process, you’ll likely come through with a quick offer above the asking price in this current market, with favorable terms for you as a seller.
Are you thinking of listing your home? You want to get the value right. You want to make as much money as you can from the sale of your property. Contact the Heffernan Team today for a complimentary listing appointment and to learn more!