Nowadays, any industry that technology takes on doesn’t stay the same for very long. Airbnb uprooted hospitality. Uber and Lyft changed transportation. Netflix not only changed entertainment, but shifted routines and enabled on-demand consumption. The list goes on.
Each time tech puts its stamp on an industry, consumer behaviors shift and their expectations go up. Now the $27 trillion residential real estate market is in the midst of its own transformation — the very industry in which many Americans will make the single largest personal transaction they may ever make in their lifetimes.
The face of this renaissance are instant buyers, known as iBuyers. Currently the “it” kid of real estate, iBuyers use computer algorithms and market projections to determine the price they are willing to pay for a property. This assumes that the property fits their “buy box,” which is defined by factors like price range, age of the home and location. Home sellers can either accept or reject an iBuyer offer. If accepted, they can sell their home for all cash relatively quick. The key output driving these types of transactions, however, is the belief that the iBuyer can then resell the property at a higher price and turn a profit.