The technological era is influenced by the tech-savvy generation of millennials and digital natives who set and shape market trends. The real estate industry has not been forsaken by this influence as well. These generations are changing the way real estate companies offer buying and selling of properties and homes. To keep pace with their diversified demands, some of the traditional real estate companies are transfiguring into iBuyers. . IBuyer is making a pronounced change in the way people buy and sell homes. It provides a simpler, convenient, and hassle-free alternative to a traditional real estate home sale. For this reason, iBuyers have mounted popularity and gaining momentum in countries with strong housing markets. Moreover, ibuyers dispense speed and transparency which the clients do not get from traditional real estate services. Hence, iBuyer is emerging as a future trend in the Proptech domain, which can accelerate the housing markets of countries like Pakistan.
What are iBuyers?
iBuyers are technological-based companies that buy homes straight from the owners. Instead of marketing homes for sale or contacting, dealing, and paying the agent or showing it to prospective clients, homeowners can directly sell them to iBuyers. IBuyers acquire detailed information about the property like its location, condition, age, zip code, etc., and with the help of technology predict the home’s future value. Then these companies offer the owners profitable cash which may be accepted or declined. Upon acceptance, cash is transferred within a few days depending on the closing deal selected by the owner. Sometimes, iBuyers purchase the properties, develop them, and then resell them in the open market at a profit. Not all ibuyers offer the same services, some of these companies deal in more than just purchasing and selling a home.
What are the Prospects of iBuyers?
Selling a home can be a complex, slow and tedious process for homeowners. It may take up to 71 days on average to sell a home through traditional real estate processes (Nesbit, 2022). Marketing a home or waiting for the interest of a prospective client may cost the owner good fortune. Therefore, iBuyers ensure a quick and convenient home selling process depending on the selling time set by the owner. A house can be sold within 24 hours on ibuyers which is nearly impossible to achieve through traditional real estate.
Excludes the Realtor
Finding a reliable person to market and sell a home could be a long hectic task. Also, negotiations and dealings begin only after the owner has a realtor to work with. With ibuyers, the owner directly deals with the company without the need of finding a realtor.
Provides Monetary Flexibility
iBuyers provide all cash offers to the house owners which comes in handy in time-restricted situations or emergencies. The cash offers give the owners monetary flexibility making the whole experience quick and stress-free. The profit may be used in other investments or purchasing a new home.
Inspections and Repairs
While working with realtors, the homeowner has to make the necessary repairs to the house and declutter after the house inspection. This process could be time-consuming and costly. However, iBuyers takes this kind of inconvenience out of the owner’s hands. Instead, iBuyers take the responsibility of property inspection and make the required repairs in the house, preparing it for sale. Moreover, ibuyers also help the owners during the decluttering process by assisting.
iBuyers give the conviction that the house would sell if it is approved by them. It becomes iBuyers responsibility to sell the owner’s house after they have purchased it. Using traditional real estate routes does not give this certainty and can leave the house owner in uncertainty.
People are living fast-paced lives these days. They do not have time to stage their homes for potential clients. The iBuyers adds to the owner’s convenience by handling the showings themselves and dealing with the prospective clients so the owners do not have to.
What are the challenges of using iBuyers?
Homeowners may not get the right offers when selling their homes on iBuyers. This is the disadvantage of selling a home through a quick and seamless process proposed by iBuyers. The offers presented to homeowners through this company are sometimes less than the home’s worth. The chances of getting more monetary profit are higher when the homeowner deals with a retailer but it comes with lots of inconveniences. Moreover, if the owner allows the iBuyer to make repairs to the house then it comes with deductions added to the final offer.
Consequently, iBuyers is a non-interactive experience for homeowners as it is a non-emotional transaction. The owner cannot negotiate with an actual person regarding the house offers, pricing, or profit. Whatever offer is presented by the company, the owner either accepts or declines it. There is no in-between. Using, agents or realtors gives owners confidence about the house and is a negotiable experience, where the owner can ask for a higher price for the house.
Sometimes, homeowners wish to put up their property for rent instead of a sale. However, iBuyers has limited services for buying and selling a house only. It doesn’t offer rental services. Due to its limited services, people prefer real estate agents over iBuyers.
Non-Representation of the Owner
Some people do not feel confident in making independent decisions especially when it comes to buying or selling a house. They feel reluctant in relying on online information only and need an expert’s opinion and assistance. When using iBuyer, there is no representation of the owner or the person purchasing the home. The owner is not represented by the expert either. Instead, the owner will have to go through the entire process alone and make an independent decision.
Is There a Future for iBuyers in Pakistan?
Regardless of the market decline, technology will continue to revolutionise the real estate industry. The real estate industry of Pakistan is growing at an exponential rate and so are the homebuyers. The convenience, speed, and ease provided by iBuyers will sooner or later diversify the real estate market of Pakistan. Pakistanis invest either in gold or land. Due to inflation, unstable gold and stock prices, etc., people are directing their investments toward real estate. Almost 50% of people prefer real estate over other assets (money control, 2022). Moreover, there is always a group of homeowners who are looking forward to selling their property for quick money in emergency or time-restricted situations. For such a group of clients, iBuyers can be a lucrative platform that provides quick services of home buying and selling. In contradiction, this company operates in areas with strong housing markets. For example, iBuyers will operate well in the south and central regions of Karachi due to stable markets whereas it may not be suitable for the northern regions of the city as property values have dropped to one-third of the price due to security issues (Khan, 2013).
Furthermore, ibuyers are limiting the role of traditional real estate agents in the market and are often perceived as a threat by the agents. Some real estate agents are accepting it as an alternative source of selling a property. However, in Pakistan, the role of real estate agents cannot be eliminated as they have a strong influence in shaping market trends. They provide the expertise and guidance when it comes to home selling and offer the services of property verification in a country where a majority of the court cases are land related. Moreover, the owner would prefer a maximum profit over 70% to 75% of the profit of the home’s market value provided by iBuyers (Gray, 2019). Additionally, Pakistan has been slow to technological adaption as compared to other countries in the South Asian region. It will be a slow and steady process for the population to accept and use the technological services of companies like iBuyers. The changing of mindset from traditional real estate dealings to a one-to-one seamless real estate process might take years.
Keeping in the mind the prospects and challenges of iBuyers and the facts stated above, iBuyers does seem to have a promising future in Pakistan. Since the majority of the population of Pakistan is constituted of youth, technological adaption is increasing at an astonishing pace. This tech-savvy generation is influencing the trends of the real estate market and showing a keen interest in investing in the housing market. Companies like iBuyers can cater to the growing demands of this fast-paced generation due to the ease, simplicity, and high-speed functioning and services offered by it. iBuyer companies need to create a strong market presence in Pakistan while building a long-term brand identity and awareness. Only then it will be able to prosper and expand in the new real estate market of Pakistan.
iBuyers are emerging as a quick and easy solution for house owners around the world. The worth of opting for the services of ibuyers depends on the needs and requirements of the owners. It is suitable for those who want hassle-free, non-negotiable, and quick housing services. Otherwise, traditional real estate is a better route. The future of ibuyers in Pakistan seems bleak at the moment. However, with the right marketing strategies, quick technological adaption, and an open mindset, ibuyers can make a difference in the growing real estate sector of Pakistan.
Gray, F. (2019, June 19). Abby Realty. Retrieved from insideabbyrealty.com: https://insideabbyrealty.com/how-you-can-engage-the-ibuyer-threat.html
Khan, T. A. (2013, November 25). The Express Tribune. Retrieved from tribune.com.pk: https://tribune.com.pk/story/636405/the-three-major-cities-rise-and-fall-in-property-prices
money control. (2022, March 28). Retrieved from moneycontrol.com: https://www.moneycontrol.com/news/business/real-estate/nearly-50-investors-prefer-real-estate-to-stocks-gold-and-others-reveals-survey-by-housing-com-and-naredco-8284381.html
Nesbit, J. (2022, January 18). US.news. Retrieved from realestata.usnews.com: https://realestate.usnews.com/real-estate/articles/how-long-does-it-take-to-sell-a-house.