More Brokerages Step Into the iBuying Business
April 23, 2019
To compete against the growing list of firms in the iBuyer world, brokerages are entering into the race of instant offers. Keller Williams plans to launch its own iBuying service next month called Keller Offers.
Keller Offers will first launch in the Dallas-Fort Worth market, and then expand to six to eight “major” markets by the end of the year, MarketWatch reports. The company plans to devote $100 million on instant offers in 2019.
“We see iBuying as an important additional offering for our agents to offer to home sellers,” the company has stated.
Unlike several other iBuying programs, consumers will have a fiduciary (a Keller Williams real estate agent) serving them in selling their home using the instant offer route. “While we believe the addressable market for iBuyers represents less than 10 percent of the overall market, we do see this as an important additional option for KW agents to be able to offer their sellers,” said Keller Williams spokesman Darryl Frost in a statement. “Our goal is to minimize the cost to the consumer.”
The iBuying movement has caught the attention of the real estate industry. Wall Street has invested in millions to buoy startups in the space. These growing firms are using technology to make instant cash offers to sellers who want a quicker, more convenient sale and bypass selling the home publicly on the MLS.
Keller Williams’ announcement follows on the heels of iBuying giant Opendoor, which launched a new initiative called Opendoor Agent Partner Program. The company says that it is looking to partner with real estate agents who they can pair with buyers and sellers when customers choose the traditional option or when the home doesn’t fit inside Opendoor’s buy criteria.
Agents are finding a role in the iBuyer world, either finding ways to work with iBuying startups or launching their own type of program. Coldwell Banker, Keller Williams, Redfin, and ERA are among the brokerages that have been testing out their own versions of an iBuyer-type program. Their programs, however, set out to ensure the agent stays at the center of the transaction, no matter which selling option the homeowner takes.
How big a bite can iBuying take out of the market? Dod Frasier, Opendoor’s vice president of capital markets, told MarketWatch that he does not believe instant offers will gain traction in every market. “Real estate is a big market,” Frasier says. “But we are a great option for a subset of customers.”
Updated: July 07, 2020