First of all, do you know what an iBuyer is?
This name is given to companies that invest in real estate by using technology to assess the price of a home.
They make a cash offer directly to the owner. This way, the traditional process of selling a home is way simple rand benefits both parties.
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There are a lot of companies offering this service at the moment, but it all started in 2014 when the co-founder and CEO of Opendoor, Eric Wu, freshened up the real state process with a new movement that forced the traditional real estate market to shift.
In his own words:
“Our mission is making home buying and selling simple, instant and hassle-free. If that means building the experience from the ground up, that’s what we’ll do… Our focus is on what’s going to produce the best customer experience.”
Offerpad is considered the second largest iBuyer in the market. They both use the buy-sell real estate model, but they differ in many operational details. For example, Offerpad includes free local moving expenses.
This company is currently buying homes in 12 metro areas.
Knock makes it to the list even though it has a different business model. They target homeowners that want to buy a new house and sell the old one simultaneously.
With Knock, you can trade the old house one for the new without them buying your old house.
They own a lot of properties so the client buys a new house directly from listings and then they list and sell the old home for them.
They currently have offers in 5 markets.
Zillow is the leading real state and rental marketplace. They launched Instant Offers in 2018 and jumped into the iBuyers market using a strong approach.
This company is expanding quickly with 10 areas so far (less than a year growth). They’re making the competition a little nervous.
To this date, these companies are the highest ranked names in the iBuyers world.
Still, Opendoor has big advantage over the others, as shown by Mike DelPrete, real state tech advisor and strategist, in his new comprehensive iBuyer report.
He explains in full detail how Opendoor has a wide gap between its closest competitors in many areas. It has ten times higher funding, purchased three times more homes than Offerpad.
Amongst many other different indicators that clearly note a wide difference between them.
Although DelPrete’s briefing gives little to no hope to new ventures, we think the development in the area is still big and new companies are joining by the day.
Some new startups may have little funding or have a small market based operation at the moment, but it’s a matter of time before they become big name competitors.
In conclusion, it’s important to point out that this movement has been booming for only five years, so we’re definitely sure that it has a lot more space to evolve throughout time.
We’ll just have to wait and see!