How are iBuyer companies different from home flippers? They are the same thing, right? Not so! Let's talk about the differences between Instant Offers and Home Flippers.
Home Flippers have been around FOREVER. In particular, they have been around since the downturn of the market and burtsting of the bubble in 2008. On the other hand, Instant Offer companies are new and expanding to more markets strategically. They are very different.
Let’s start with PRICE. What are they willing to pay for a house?
Instant Offer companies like Zillow & Opendoor are willing to pay close to market value for properties. Home Flippers are looking for the lowest price possible. They are actually looking for what I would call a distressed price.
So, what kinds of PROPERTIES do these companies buy?
In the case of Instant Offer companies, they are ONLY buying properties in good condition. They are not looking to remodel, renovate or rebuild houses. The exact opposite is what home flippers are looking for. They want to find homes that are in really poor condition that they can bring up to a much higher level and command a much higher price.
Lastly, who are the PEOPLE that typically sell to flippers and Instant Offer companies?
In the case of IO companies, they buy homes from mainstream home owners, bread-and-butter homeowners who are looking for a bit of speed and convenience and may be willing to leave a little bit of money on the table. Home Flippers are looking for homes that are in poor condition that are big projects the average home owner would not want to take on. In that instance, selling to a home flipper makes sense.
So, that is the short and sweet on Instant Offers versus Home flippers. Home flippers came first and iBuyers are changing the landscape.