Key Highlights
- According to zavvie’s inaugural Seller Preference Report, iBuyer purchases plummeted -82% y/y in Q3 2020
- iBuyers, after purchases paused and restarted due to pandemic, acquiring homes at average of 95.5% of market value in all markets
- Offer acceptance at 4.7% in Q3, slight uptick from 4.2% in 2019
Zavvie, a multi-year Inman innovator winner for its comprehensive Seller Solutions platform that connects agents and their clients with ALL selling options in their market and a provider of bridge offers, just released its inaugural Seller Preference Report. This report indicated that iBuyer home purchases plummeted -82% y/y in Q3 2020. This “falling off the cliff” data point is, unsurprisingly, a direct result of the COVID pandemic.
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In March of 2020 at the outset of the COVID pandemic, Redfin, Zillow, Opendoor and Offerpad paused their home purchase activities. By the end of May, all four of these iBuyers had returned to their respective marketplaces and, contrary to the huge drop in purchase volume, these four iBuyers collectively have been purchasing homes at an average of 95.5% of market value across all housing markets.
Additionally, this zavvie Seller Preference Report indicated that offer acceptance by sellers of iBuyers was at 4.7% in Q3 2020, a bit over the 4.2% acceptance rate last year. The report said, “This suggests that for some sellers, the iBuyer benefits of speed, certainty, convenience – and perhaps above all safety – are compelling enough to justify a lower offer amount and higher service fees – even in a strong seller’s market.”
Compared with instant offers, the acceptance of bridge offers, or buy-before-you-sell bridge solutions, runs approximately four times higher and that bridge offers convert at an average rate of 22%. (Zavvie, EasyKnock, Homeward, Knock and Ribbon offer bridge solutions or offers.)
Zavvie’s report noted that iBuyer service fees averaged 8% in Q3, higher than the 7.6% charged in 2019 likely due to the higher risks associated with pandemic. Opendoor reduced its service fees to no more than 5% in August while service fees associated with bridge offers/solutions averaged 2.03%.
Thanks to zavvie and HousingWire.
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