Instant Pot Real Estate: The Rise of the iBuyer and How to Actually Compete
It’s official. I think I am the last person on earth who doesn’t own an Instant Pot™.
All my friends who have one seem to rave about it. Look, baked potatoes in only 60 seconds! A whole roast dinner in only a few minutes! This will totally change your life!
I am skeptical. It’s not that I love to spend hours in the kitchen slaving over dinner. It’s just that I am naturally doubtful about things that claim to be that simple. I mean, baked potatoes in 60 seconds sounds amazing, but what’s the catch?
I feel the same way about the iBuyer option in Real Estate. This isn’t a new concept. For years there have been those “we buy houses for cash” companies that offer homeowners a quick way out. But lately this has gone mainstream, with major players like Zillow, Redfin, OpenDoor, and OfferPad now offering iBuyer options.
Let’s face it. Selling your house can be stressful. Exhibit A:
Sellers are now seeing shiny, happy TV commercials, telling them they can “skip the hassle” and sell immediately, instead of using a traditional listing agent. This means they don’t have to clean the house, allow for showings, wait to receive offers, or stress about repairs. They simply put their hand up and say they want to sell, and they receive an electronic offer right away. Sounds amazing, right? Obviously, there’s a catch. And it’s a big one.
First, iBuyer offers are seldom at market value. These companies are not buying these homes for their own personal use, they are buying them to resell them. (And they are using professional photos, 3D tours, floor plans, and staging to squeeze the most value out of the home when they do!) Their offers are designed to allow room for resale. In addition, there are fees. Big ones. These fees can be up to 13% or more of the sales price. The fees cover things like closing costs, administration, and the convenience of a quick closing. Then there are reductions for repairs. Most of the time, the original offer will be reduced once they determine the house isn’t in perfect condition. All in all, while you might be rid of your home quickly, you are paying a hefty price for the convenience.
So, what should we be doing about this? How do we respond to this new real estate normal? It’s time to up our game.
Step 1: Don’t pretend the iBuyer option isn’t there.
Get comfortable explaining the iBuyer process. Education is your best defense. Know the fees and the costs associated with each program. Do you have a seller who is considering an electronic offer? Ask them to share the result with you! Some agents are even approaching electronic or instant offers as a secondary option for their seller, which gives them the opportunity to compare the fees, costs, and potential outcomes real time. Include these case studies in your listing presentations and on your website. The more transparency, the better.
Step 2: Give them what they can’t get from the other guys.
Zillow and Redfin have great websites, it’s true. They are user friendly and popular. But they don’t have all the answers or all the information. This is where you can shine. Create interactive 3D tours for your listings, allowing the buyers to emotionally move in. Share client stories and testimonials, explaining your role in the process and the value you bring. Share floor plans with accurate measurements that help buyers to plan and sellers to see your professionalism.
Step 3: Don’t wait for them to come to you.
You can’t expect the buyers and sellers to stumble onto your website. You have to meet them where they are at. It’s time to diversify your marketing efforts and go where the people are. This is where your database becomes critical. Use social media to share your iBuyer vs. reality case studies. Use Instagram or IGTV to share those videos. And showcase those interactive 3D tours as a quick link or a QR code on your ‘just listed’ postcards. (QR codes are hot again! Who knew?)
“Quick n easy” may have its appeal when it comes to baked potatoes, but when it comes to selling a home, it can come at a cost. Make sure your buyers and sellers are getting the whole package. (And extra sour cream!)