Nearly every industry has undergone massive shifts over the last decade. In just the past three years, innovative individuals and companies alike have challenged standard real estate procedures.
Many well-funded companies – most notably referred to as iBuyers – have entered the real estate space in an effort to revolutionize the process of buying and selling homes. As consumer behavior in the space continues to grow toward more tech-oriented, streamlined processes, these efforts have proved successful thus far. In fact, the majority of individuals and companies behind this revelatory push favor tech implementation in unprecedented ways.
Countless investors and companies have long sought to disrupt the residential real estate industry, but none have brought tangible change quite like iBuyers. The term “iBuyer” has emerged of late in reference to home buying companies that use automated valuation models (AVMs) and other technology to make quick offers to residential home sellers. These companies represent a massive shift in the way people choose to buy and sell what is likely the biggest purchase of their lifetime, their home.
Brian Bair and Jerry Coleman founded iBuyer platform Offerpad in 2015 after long careers in real estate. Both had been involved in the industry for more than a decade: Jerry on the commercial real estate front, where he pioneered the institutional single-family rental industry by co-founding Invitation Homes; and Brian on the residential side, where he was one of the leading real estate agents in the country over the last decade.
Together they saw a vast opportunity to fundamentally change the way people buy and sell homes. Fast forward to now and the category is at the forefront of on-demand, tech-enabled real estate. The industry is recognizing the the importance of this shift as well, iBuyers were named the 2017 Inman Person of the Year for sparking the most revolutionary change in how homes are sold since the advent of the MLS.
Brian and Jerry launched their home-buying platform during a time when real estate was ripe for disruption. Real estate websites came to be a decade earlier, and consumers found transparency into home values and home valuation statistics like square footage, etc. But, they still lacked freedom when buying and selling a home in a big way. What’s more, they had very few options at their disposal. They could work with an agent, with whom they needed to establish a great deal of trust, or they could sell independently, which potentially entailed a lot of work and frustration.
Consumer behavior had also changed. The ubiquity of smartphones and on-demand everything – from ridesharing, package delivery, to food service – conditioned consumers to demand choice, freedom, and certainty across all points of interaction in virtually every industry. This, of course, diametrically opposed traditional real estate methods and processes – with their intrinsically lengthy and rigid dynamics. It wasn’t uncommon for a market-to-sale timeline to stretch weeks or even months.
In the most fundamental sense, iBuyers created business models to address this very freedom of choice and certainty that savvy consumers grew to expect. In doing so, they’ve helped usher in the future of real estate. Not only do iBuyers possess a firm understanding of real estate, but also further enhance this understanding via technology and data-driven intel. It’s this unique mixture that fuels iBuyer growth and attractiveness to modern consumers.
Ultimately, iBuyers grant the consumer freedom of choice and an unprecedented degree of certainty in an age-old industry ripe for progress. Consumers can now control the entire real estate transaction – from selling their house, choosing their closing date, and buying their next home.