Silicon Valley Wants To Outflip The Flippers In Residential Real Estate With Instant Buying
Silicon Valley wants to turn the tables on flippers using technology. Flippers usually buy homes, fix them up, and then sell — or flip — them. But flippers are doing it old school for the most part. Now instant buying (
Even though instant buying is still a small part of the market, but it is growing at fast. Take Zillow, for example, it bought fewer than 700 homes in 2018 but it projects it will buy 5,000 homes per month in three to five years.
“Established companies like Zillow and venture-backed upstarts like Opendoor and Offerpad have raised billions of dollars on the promise that they can use sophisticated algorithms to predict the value of individual homes,” Business Times reported.
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“You should be able to sell a home within a handful of clicks,” said Eric Wu, Opendoor’s chief executive.
“Opendoor, the first big iBuyer, bought more than 11,000 homes last year and in the past year has raised more than US$1 billion to step up its pace.
The companies typically aim to hold homes for 90 days or less before selling them, typically to an individual buyer. For the eventual owner, little changes about the process,” Business Times reported.
iBuying has its naysayers. After all, buying a home is a major purchase.
And “houses are not taxis. A bad cab ride might set a user back US$20 and make him or her late for a meeting. A house is the largest asset for most people and the most expensive purchase they will ever make in their lifetimes,” Business Times reported.