- Proptech Zone
Buy Sell & Rent


iBuyers are changing the way people are buying and selling homes, in some cases, offering a simpler and more convenient alternative to a traditional home sale with greater peace of mind. By using technology and automated valuation models, which take hundreds of different factors into account, iBuyers are able to make a quick and well-informed offer on a house. If the seller accepts, the iBuyer assumes the risk and holding costs of finding a buyer in exchange for a relatively small commission, providing a quicker, and certain sale.

What is an iBuyer?

An iBuyer is a company that uses technology to make an instant offer on your home. iBuyers represent a dramatic shift in the way people are buying and selling homes, offering in some cases, a simpler, more convenient alternative to a traditional home sale.

How iBuyers operate varies, but the underlying idea is that a company estimates the value of your home and makes an offer. If you accept, they take on the burden of owning, marketing, and reselling the home. Depending on the service you choose, the benefit is the certainty of an all-cash offer and more control over when you move. This can be extremely attractive for people who need to move quickly, for example when changing jobs.

iBuying vs Home Flipping

iBuyers are often confused with home flippers, yet the two business models can be very different. Home flippers want to profit from buying low and selling high. They often target distressed properties, make major renovations, and then sell at a significantly higher price.

On the other hand, iBuyers typically focus on homes in good condition. They aim to make an offer in line with what a reasonable buyer would pay, commonly referred to as fair market value. In most cases, they’ll conduct minimal repairs to ensure the safety and functionality of the home before finding the next buyer.

Automated Valuation Model vs Comparative Market Analysis

Automated valuation model (AVM) refers to a model that iBuyers use to quickly process large amounts of data about a home to arrive at an offer price.

Traditionally, home values are calculated by looking at a selection of similar homes nearby that have sold recently (comps). The issue is that no two homes are identical, so adjustments need to be made to compensate for this. Accurate adjustments are very difficult to make. Computers however solve this problem by analyzing the individual features of hundreds of comps, providing a valuation almost instantly.

Key points of iBuyers

– Quick, secure way to sell a home
– Offers are made based on an automated valuation model
– A large benefit is the certainty of an all-cash offer and more control over when you move