LATHAM — A new real estate brokerage is the first in the Capital Region to operate on the iBuyer platform, a digital marketing tool for speedy online sales.
The option offers sellers the potential for a quick sale with minimal effort, at a potential tradeoff of a lower sale price than would be realized through the traditional model of brokers advertising properties on the open market.
New Abode offers both options — sales agents with feet on the ground or leaping into cyberspace — depending on whether its seller clients prefer to maximize their sale price or minimize their time and effort.
Owner Jesse Holland said he’s been following the iBuyer trend elsewhere in the country and decided to adapt it here.
He’s seen the traditional stages of homeownership — graduate from college, rent an apartment, marry, buy a house, sell it and buy a better house — fraying and morphing into a model that can fit the iBuyer platform, with homeowners potentially more mobile than in the past.
“We wanted to be able to make sure there are other ways to do things,” he said. “Is it for everyone? No.”
Holland said iBuyer is best suited for people who want or need to make a quick sale, but don’t want to do it through the local cash buyer looking to flip the house at high profit.
New Abode will estimate the value of a house through local market data analysis and post it for an instant offer from potential buyers.
The process is not exactly instant, but it is quite fast — time on market is about 48 hours in the best-case scenario.
The seller decides whether to accept the offer, which is contingent on an inspection by the would-be buyer.
The “I” in iBuyer variously stands for instant, internet and institutional buyer, depending on who is defining it. (Holland goes with “institutional,” referring to larger companies as Knock, Opendoor and Zillow.)
The iBuyer model accounts for a small percentage of sales nationally but was steadily gaining traction, particularly in larger markets, before the COVID-19 pandemic rattled the real estate industry early this year.
Redfin, a national real estate company active in technology-driven sales, estimates in its most recent report that the iBuyer market share grew from 0.2 percent in late 2017 to 0.6% in late 2019, then dropped to 0.1 percent in mid-2020.
(National Association of Realtors data show a sharp plunge in housing sales of all types this past spring, amid the onset of the COVID crisis, and an even sharper rebound through the summer and autumn.)
Holland said there’s not a simple formula on the markdown a homeowner could expect on an iBuyer sale. Ten to 15 percent might be a starting point, he said, but it could be more or less depending on the house, the neighborhood, the region and the amount of repairs the house needs.
“It’s hard to put an exact number on it,” he said.
The seller doesn’t have to accept an offer, and doesn’t have to stick with iBuyer — New Abode can shift to the conventional model of selling a house, through the local Multiple Listing Service.
Its commission is the same either way — 5 percent.
So New Abode would likely earn less money through an iBuyer sale. But it would avoid the greater expense and effort that comes with the traditional sales route, for things like advertising, individual showings and open houses.
“We make the same money whichever way it goes,” Holland said. “It’s not enough of a difference on the commission.”
For would-be sellers, the money gap is more significant: $10,000, perhaps, or $20,000, or more.
It’s an individual decision for each buyer to make based on their circumstances, Holland said, but generally speaking, someone who holds very little equity in a house would fare poorly in an iBuyer sale.
Better-served through iBuyer, he said, are those who own a fixer-upper but lack the funds to fix ’er up; a person who owns their home or holds substantial equity in it; and an estate executor paying steady expenses (tax, insurance, maintenance and utilities) on a house that is sitting empty.
Holland said it is too soon to tell if New Abode will find a particular geographic or price niche through iBuyer. He is starting with a workforce of five licensed real estate agents and hopes to expand to 25 next year.
The Niskayuna resident is a licensed real estate broker and also president/founder of Sunrise Management & Consulting, a developer/manager/consultant on larger-scale rental housing.
New Abode is headquartered in the same building as Sunrise, within Sunrise’s passive-solar apartment complex off Route 7 in Latham.