Brokers who are ignoring iBuyer are making a big mistake. If iBuyers exist in your market, it’s time to develop a strategy today. Do not let your opinion of the long-term viability of the iBuyer discourage your actions. Agents and brokers need to be ready to discuss this option with their sellers today.
When you unpack the consumer popularity with iBuyer programs, you learn that consumer interest is driven by a single attribute, what would one of these companies pay for my home today that would allow me to avoid the experience of listing my home traditionally. Consumers have choices today that they have not had before. They have the option to sell their home for less but do it fast and conveniently. No staging, no open houses, no waiting for the offer. One out of every five sellers is interested in seeing what iBuyers would pay for their home before listing with a traditional broker. That means that 1 out of 5 listing appointments are ending with “I want to review an iBuyer offer before I list with you.”
There are three strategic tactics to handling iBuyers: Zavvie Offer Optimizer™ Suite, Buy Before You Sell programs or agent education.
Zavvie Offer Optimizer™ Suite
Zavvie is the technology arm of Denver area brokerage 8Z Real Estate. Everything that Zavvie offers to brokers has been battle-tested in their brokerage. As a broker, 8Z is intimate with the conversations that agents have with sellers when it comes to iBuyers. Rather than lose a listing to an iBuyer, Zavvie developed software that allows 8Z agents to poll iBuyers for offers on behalf of their sellers (called Collect). Once the agent has collected the iBuyer offers, they are inserted into a report for the seller, offering an easy way for them to evaluate each of the offers (called Compare).
The Offer Optimizer suite allows the agent to deliver a consultative overview of their options to sell to an iBuyer, or list their home traditionally. Many leading firms like Better Homes and Gardens Metro Brokers and Allen Tate have deployed this solution with success. The BHGRE Metro Brokers and other programs white-label the Zavvie suite. Metro Brokers calls it Instant Move https://zavvie.com/instantmove-metro-brokers/
Zavvie is also part of the NAR Reach program.
Buy It Now
Buy it Now is a program that blends all of the benefits of being able to move immediately without selling the home for a discount. Real Estate companies with mortgage bank relationships have been operating variations of a Buy it Now program for years. Companies like Howard Hanna, Hunt Real Estate, and many brokers that are part of Berkshire Hathaway Home Service of America have made this popular. Howard Hanna has done a good job of branding their program and communicating it on their website and in other broker marketing programs. The program is called Move Faster. You can see how they articulate it here – https://choose.howardhanna.com/movefaster. Firms offering these programs use their mortgage warehouse line to float the money. You can think of it as a bridge loan. The expenses to the transaction for floating the interest for 90 days is not overly expensive.
If you know that sales associates at the kitchen table are going to encounter the iBuyer objection at the kitchen table, you better help agents overcome that objection.
One of the best pitches that I have seen is to estimate the amount of equity in their home that they are giving up, then articulate the amount in terms of mortgage payments. For example, “The equity that you are giving up in your home is equal to the last 27 mortgage payments that you have made.” No home seller wants to give Zillow 27 mortgage payments.
For now, iBuyer is going to shape many listing appointments differently in the 20 markets where these programs are prevalent. While interest rates are low and access to capital is abundant, there will be plenty of activity and expansion of these programs. It’s vital that you have a plan or you can adopt all three of these plans.
The good news is that only 1 out of every 20 iBuyer offers are accepted today. That means that the iBuyer offer is only right for a minority of home sellers. Hang in there. And remember, homes sellers are home buyers too. If the seller thinks that iBuyer is right for them, pull up your exclusive buyer representation agreement and have them DocuSign that.