iBuyers Can't Compare to Personalized Service of Local Real Estate Agents
What does the 'i' in iBuyer stand for? Instant. Used in a sentence: "Life can change in an instant." How true this is. What an example of 'instant' we have learned during the coronavirus pandemic and the economic shock of the United States shutting down to stop the spread. Life DID change in an instant. And what happen to big iBuyers? They were gone in an instant. They canceled contracts, and (in my opinion) left Sellers stranded and scrambling. This is opposite the behavior of the local real estate agents. Local agents responded with strength caring for their clients, creating solutions, adapting to the Stay-at-Home Order with new methods. Advancing; not retreating; not abandoning.
iBuyers were heralded as the newest disrupter to the traditional real estate sale. For an increased fee (commonly between 7%-9%), iBuyers promised to make an offer to Sellers; conduct inspections; and close quickly. But, then times got tough and their real loyalty surfaced. Not surprising (and perhaps not wrong for their business model), we found that their true alligence is to their shareholders; not the individual sellers. You see the iBuyer model is to buy a home; secure fees for the purchase; and then quickly re-sell the property for profit. Nothing wrong with that, but I know, as a Seller, you're thinking this sounds ridiculous. Sounds like you would pay more and net less...so where's the allure? Because their program was like a promise that your house sale was guaranteed allowing you to go off and buy your next home with the funds. But not when times get tough. The largest iBuyer companies have canceled their contracts by emailing the startled sellers. They didn't want to buy homes and then have a tough time selling them. That's not easy.
I want to admit my bias here. Being a local real estate broker, I was skeptical of these programs from the start. I wondered how these large companies could make money on the re-sale unless they bought the home at less than market value. (If I can buy your home and re-sell it for more in a quick turn around time, why didn't you sell if for more? Make sense?) Adding on top of this, the fees that are generally higher than any real estate brokerage. Hmmm....it didn't add up (literally and figuratively). I came to the conclusion that the Sellers were actually Buyers too and were purchasing a 'sure sale on a given date.' But then the coronavirus hit and times got tough... The domino effect of a canceled real estate sale can be astonishing.
To me (again, biased as I see how caring and concerned by agents are for their clients), the insulting part of this sad story is that some of the bigger companies released a statment basically saying 'when things get easier, we'll be back.' In contrast, I'll make a statement for KBB: 'We won't leave you flat...ever.' We're here to stay and we're here to help.
Comments or Questions
Kissinger Bigatel & Brower Realtors was established in State College in 1933. With the intent to serve the local people, this brokerage started in a very small office, above the Corner Room on Allen St. We're still here and we're not going anywhere. We love Centre County and made a little video to spread strength and positive vibes during this pandemic. You can view it here: https://www.1kbb.com/blog/a-message-from-kbb-to-centre-county/
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