In this post, Rob Hahn has done a great job of setting the stage for a very important industry debate. Will the iBuyer model flourish or fail?
So let’s talk about that for a moment. In past blogs, I have referred to the iBuyer as a model that has the potential to be the “transaction of the future.”
So why do I believe this to be true?
In order to answer that question, you first need to take off whatever hat you are wearing in business and put on your consumer hat.
You see the iBuyer model is so dependent on making a smart buying decision, that it has almost unknowingly streamlined the entire process of evaluating, pricing and purchasing a property. And oh yes, then doing the same when they become the “iSeller."
And all of this was done literally by mistake.
Forget the buy and flip scenarios, what the iByers have done is to literally reinvent the entire purchase and sales process for resale real estate. They have taken a totally objective, institutionalized approach to these business processes. But you say, wait Ken, that cannot be done with a residential real estate transaction that is full of emotion and the need for hand holding.
Really? I’m not buying not that anymore.
I firmly believe that the improved iBuyer processes will ultimately define the future of the residential real estate consumer experience. The predictable, formatted, duplicatable processes are what the consumer needs to remove the emotion we have created by not approaching the transaction like the iBuyers do.
See also my comments at the end of the article below and you begin to see a pattern of consumer acceptance for this model developing. Buyers today that purchase properties using the traditional brokerage process are essentially the iBuyer. They now need to put their capital down, finance the balance, fix up the property and then hope one day to sell it for some amount of upside. The only difference with this case is that they are forced to struggle through an elongated, archaic transactional process.
The iBuyers are removing the need to endure that process by buying and then selling properties with streamlined and improved buying and selling processes.
Who would you bet on winning the favor of the consumer? The traditional brokerage model or the vastly improved iBuyer model? Add this to the favorable economics that Rob defines in his blog and you begin to better understand why we need to “stop loving to hate things” and we really need to start learning form those we “hate” or fear.
We need to wake-up as an industry and, if for no other reason, to learn from what the iBuyers and iSellers are proving out with the consumer. What we do is in serious need of improvement and now is the absolute best time to begin on making those improvements.
Have a great day!