Alyssa Nassner

The perception is that iBuyers make low-ball offers, but a new study suggests otherwise Since the launch of Opendoor in 2014, motivated home sellers have become increasingly likely to consider selling their home to a so-called iBuyer.
Short for ?instant buyer,? iBuyers use an algorithm to make a ?fair market? offer on a home. Should the seller accept the offer, they can close the transaction in a matter of days and have a flexible move-out date. It also allows sellers to tap the equity in their existing home so they can bid on the next house they buy.
The added convenience to what is traditionally a long and stressful process of buying and selling homes comes at a price, though. It?s long been suspected that the offers iBuyers extend to sellers are below market rate so they can make more money when they fix up the home and sell it on the open market. This perception has dogged the industry since its inception. iBuyers, however, say the vast majority of their money comes from the roughly 7.5 percent transaction fee they charge, not from the difference between what they pay for the house and what they sell it for.
But to what degree is this true" A new study by real estate technology consultant Mike DelPrete reviewed more than 20,000 iBuyer transactions, which accounts for more than 95 percent of all iBuyer transactions from 2018 to present.
His analysis focuses on Opendoor and Zillow, which account for 86 percent of all iBuyer volume. He concludes...