By Matthew Templeton
Managing Principal
KW Urban Dallas

Why is there so much movement in the iBuyer world?

First: What is an iBuyer?

An iBuyer is an institutional or business-based investor that uses automated valuation models (using data and algorithms to estimate value and trends over time) to make offers on properties in the market without actually having to have a huge workforce on the ground.

Who are these guys? Opendoor may be the one you’ve heard about the most. But also, Knock (a version of iBuying that gives you cash to buy the home you want before helping you sell yours), Offerpad, Coldwell Banker, Zillow Instant Offers (opened in Dallas on April 15), and coming in May to Texas, Keller Williams, according to Inman News this week.

How is this different than a traditional investor? In some ways, it’s not — individuals with bandit signs that say things like “we buy houses for cash” and companies like HomeVestors (“We Buy Ugly Houses”) with billboards have been models for decades.  

What’s different is that these institutional investors can buy properties at scale and their hope is to make money on the volume acquisition.  They claim to be purchasing at higher prices than a traditional investor (seemingly providing convenience for a slightly lesser price than retail).  The marketing pitch is slick. The idea behind it seems amazing — except that homes are not just data points. The fallout is yet to be determined.

(more…)

Matt Templeton of Keller Williams Urban Dallas regularly educates Realtors on how to make the most of the current market. (Courtesy Photo)

By Matthew Templeton
Managing Principal
KW Urban Dallas

It feels like there have been fundamental shifts in the real estate industry within the last few months. Technology is the buzz word, money is being thrown around, and CEOs of just about every top real estate-related company are out. The last few weeks’ news sums up that feeling.

September 2018: Compass closes another funding round for $400 million — money used to build more software and buy more agents.

And then …

February: Rich Barton (billionaire co-founder of Expedia and Zillow) takes the reins from Spencer Rascoff, who was CEO at Zillow for nine years.

February: Keller Williams rolls out the first artificial intelligence and data-driven platform in the real estate industry — others have been clamoring to follow

February: RE/MAX says [sic] “Our amazing technology is coming, and it will be best in class,” and makes a technology acquisition, Booj.

Last Week: Data-driven Opendoor will now show listings from rival brokerages and offer Redfin-like rebates.

Last Week: NTREIS Board holds a vote on whether to sell greater data access to Zillow. April will be a reckoning month for North Texas Realtors and their data.

We’ve moved into a new real estate era that is faster paced and increasingly powered by technology and data — more than ever before. But there’s something else afoot. It’s eerily similar to what happened with the dot-com bust. Real estate technology companies are flush with capital — in fact, 2018 was a banner year for real estate technology investment.

And yet many of the top “technology” or “platform” companies in the industry are not profitable.

(more…)