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7 Ways to Compete With iBuyers

October 13 2019

hdc 7 ways to compete with ibuyersChange is coming. There is a new way for homeowners to sell a home: iBuyer programs. Homeowners can get an instant cash offer over the internet for their house. While this sounds great, it is not without its downsides for both the seller and potentially your business as a real estate agent.

iBuyer programs are currently only offered by a select few companies in limited markets, but they are growing quickly and could be coming to your market soon.

Kenny Klaus, a leading agent and founder of the 30-member Kenny Klaus team recently hosted a Secrets of Top Selling Agents webinar to share how you can compete with these iBuyers to win the listings and make the sale.

1. Lead the Conversation

Klaus starts off by saying not to be afraid to lead the conversation regarding iBuyers. In the Phoenix area, where one iBuyer program is being tested, about 40% of sellers receive an iBuyer offer. With that much market penetration, you simply cannot ignore this selling method.

As an agent, you have to be able to share what you can do versus what the iBuyer program can't. This often comes down to a tradeoff between time and price. You have to share with your potential client that with the iBuyer program, they will have to sell the home for slightly less than market value. Yes, the program will accommodate a quick sale, but you will get them the best price for their home.

2. Be as Transparent as Possible

Your clients want to know everything that is going on with the sale of their home and they want to know every option. Provide your clients with all their options, being as transparent and open with your clients as possible.

This may include iBuyer opportunities. Leaving out iBuyer opportunities risks your credibility as an agent. Don't hide iBuyer programs and pretend they don't exist. Talk about every option available to your sellers.

3. Offer Lines of Credit

This next option isn't for everyone, but you can consider offering your clients a line of credit. If your clients need to make some repairs to their home before they sell, give them some options for a line of credit to make those repairs to increase the value of the home for a better sale price.

Klaus mentions that if some of your clients take $10,000 to improve their home, then there is the possibility to increase the sale of the home by $20,000. This poses a great opportunity for you to gain a sale.

4. Leverage Your Relationships

Let's say that your clients need to make some repairs, as mentioned previously. They will need someone to do the work for them. Klaus mentions that a good way to make yourself stand out is to leverage relationships with those who know how to do home improvements—such as painters, carpenters, or plumbers.

As an agent, you can leverage your relationships to get homes repaired and ready for a sale. Klaus also mentions that this can be an opportunity for you to stand out amongst the other agents and show that you are ready to be there for your clients.

5. Advocate for Your Seller

One of the best ways for you to show that you truly care for your clients is to be their advocate. You have to remain neutral, but also represent their best interests. Make their experience selling a home the best experience you can.

6. Pump Your Sellers Up

Selling your home to an iBuyer is easy, but your clients will likely lose a lot of the equity they built in their home. Show your sellers that if they work with you to sell their home instead of going with an iBuyer, they'll likely get more for their home. Klaus refers to this as "Short term pain for long term gain."

In one of Klaus' examples, listing a home and showing it has a net difference of $16,000. He showed the home four times in one weekend and placed a value at $4,000 per showing. That being said, there is often at least a $10,000 difference when selling your home through an iBuyer versus on the market.

7. Be the iBuyer!

One way that Klaus mentions you can compete with iBuyers is to be the iBuyer. If you have the cash, you can buy the home at a price that is comparable to the price being offered by the iBuyer. Be cautious with this, though, as it can be risky. While you do have the opportunity to make yourself some money, you never know where exactly the value of the home will be as time goes on.

Competing with iBuyers can be a monumental task. But, if you prepare yourself to work with your clients and provide them with all of the opportunities possible to sell their home for the best price, you just might have the best chance at selling your client's home for them. For more information about competing with iBuyers, watch the free Competing with iBuyers webinar here.

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