The age of the iBuyer has arrived, and while the trend has not quite hit the Chicago market, agents already are preparing themselves for what the future of home sales means for their business. Matt Laricy, managing partner of The Matt Laricy Group at Americorp Real Estate, worked his first and only iBuyer deal earlier this year through the online home sales company Zillow. His takeaway: “It is a fad.”
Laricy said the iBuyer model “makes sense when the market is good” but asked: “How well is it going to work when properties don’t move?”
His experience with Zillow Offers was “indescribably terrible,” he said, noting that, while a strong lender should be able to close in 21 days, with Zillow it took more than three months. “My theory with iBuyers is they hired people who are not good at their jobs, and they think that it will be easy-peasy, and they don’t have to do anything,” he said, adding that the Zillow sale was the “worst deal done in my entire career.”
Laricy noted there is an upside for agents who are used to getting Zillow business: They get paid a commission and don’t pay anything for the lead. But he added the caveat that the consumer’s experience might not be worth it. “This is not a buildable business,” he said, adding that when the market goes soft, most sellers won’t be willing to leave the $10,000 on the table that they could have made by hiring an agent.
Joe Siciliano, sales manager for Compass Lincoln Park, also emphasized the importance of personal relationships in the real estate business but took a more optimistic approach concerning iBuyers. Asked if the average agent should fear the impact of iBuyers on their business, Siciliano said, “I don’t believe ‘fear’ is the right word.”
“I think we, as agents of Chicagoland who represent sellers, should want to learn about the iBuyers, what this term truly encompasses and how it will affect the relationships that we have worked so hard to build over time,” he wrote in an email to Chicago Agent. “We also need to remember to acknowledge that an offer from an iBuyer may be in the seller’s best interest.”
Gary Jacklin, broker and owner of RE/MAX Action in Lisle, said he does not believe that iBuyer companies will replace agents. “The sky is not falling,” he said, noting that the agent’s role is as an advisor and consultant. He echoed Laricy’s take that iBuyer companies are successful in a hot seller’s market where the risk is lower. He also added that, as a consultant to the seller, agents should let clients know that using an iBuyer is an option but that their decision might result in less money in their pocket.
In most cases, though, it comes down to relationships. Selling one’s home is an emotional decision, and sellers “want to be comfortable that they’re making the right decision,” Jacklin said. “This may sound trite, but people have to know you and like you and trust you, and then they’ll do business with you.”