How iBuying Programs Work
In every industry and even in our daily lives, technology can be both a blessing and a curse. Here at Anvil Real Estate, we rely heavily on our innovative technology resources to assist us when helping buyers and sellers through their real estate journey.
In recent years, the real estate industry has started using technology in new and innovative ways, including using it to predict real estate values and even purchase homes. This is where iBuying comes in.
So what's an iBuyer? iBuyer companies often operate nationwide, purchasing homes with cash, sign-unseen. iBuying programs rely on technology to put a value on homes they are purchasing, using data, insights, trends, and advanced algorithms to mimic the decision-making and problem-solving abilities of a human. Sounds almost futuristic, doesn't it? Just ask Zillow, the online real estate marketplace company that started using AI as part of their Zillow Offers program.
In an ever-changing industry like real estate, where valuations fluctuate daily, weekly, and so forth, using AI to predict pricing has proven to be a costly mistake for Zillow. The company states that while they have purchased 27,000 homes between April 2018 and September 2021, they have only sold approximately 17,000.
One key point to also note, is Zillow's recent announcement that they will be shutting down their Zillow Offers program. Zillow blamed the program’s lack of success on purchasing homes for prices that exceeded what they believed they could turn around and sell them for. Despite plans to accelerate its expansion, the iBuying business, in plain terms, became too risky.
We strongly encourage both buyers and sellers to do their due diligence and find a reputable real estate agent or broker who they trust. This is especially true in our current market, which remains hotter than ever. They can help answer your questions, locate less visible listings, move the process along with their relationships, and make the process stress-free, something AI could simply never do.
If you are looking for a real estate agent in South Orange County, we would be honored to introduce you to one of our experts! Call us today.