It’s about to become multi-billion dollar market and now Keller Williams is getting in on the action. The iBuyer way of home buying has recently exploded, accounting for about 5% of real estate sales in markets where iBuyers are present. Keller Williams has now entered the market with their own product, Keller Offers.
The term iBuyer stands for “instant buyer” and refers to a company or entity that will purchase a home quickly and typically sight-unseen. By using specific valuation models, the iBuyer makes an offer and the seller has the choice of accepting it and closing usually within a week.
For some sellers, this is a great option. Sellers who need to liquidate quickly, who are moving for a job relocation, or who are in particular financial distress might find an iBuyer an attractive way to get out of their mortgage obligation. However, the downside is that the cost of using an iBuyer is typically higher than that of a traditional sale. The seller still pays the 6% real estate commission plus a liquidity premium. When you add these two fees together, it could total about 10% of the sale price.
Also, an iBuyer’s offer is usually lower than fair market value because the iBuyer is leaving room for a profit when they sell the house. While this is different from “flipping houses” in the sense that most iBuyers do not undertake major renovations or purchase houses in disrepair, it is similar because the iBuyer could make a nice profit by being patient and selling the house on the open market.
Keller Offers was created to help minimize costs to consumers while giving agents a valuable option to offer their clients. Keller Offers will begin operating in the Dallas/Fort Worth market this month and will expand into up to eight additional major markets before the end of the year.
The ultimate decision is up to the seller. They are the only ones who can put a value on the time it takes to sell their house and in many cases, an iBuyer is a smart choice. Keller Offers is looking to become that smart choice by making competitive offers and partnering with Keller Williams agents to ensure a smooth transaction and seller support.