iBuyers Get More Comfortable with Virtual Home Flipping
The technology to visit, bid and close on homes existed pre-pandemic, and iBuyers now rely on it for more acquisitions – but it’s unclear how successful they’ll be.
NEW YORK – Online real-estate platforms are using computer programs to automate home flipping, with success stories yet to be determined.
The pandemic seems to have resolved initial skepticism about an electronic approach, with virtual showings and similar offerings now viable and often preferred. For example, Zillow said its home purchases more than doubled sequentially in the second quarter, and Redfin reportedly purchased 40% more homes in the second quarter than it did all last year.
Meanwhile, Opendoor said it bought more than 8,500 homes in the second quarter and ended the period with contracts to obtain 8,158 more, worth $3 billion.
Opendoor is currently in 41 markets, and it’s channeling its diversity as both an opportunity and a bulwark: If demand for employment suddenly changes in one city, for instance, the platform wants to have a presence in the city where momentum seems to be building.
Opendoor is now so confident in its iBuyer technology that it no longer has to see a home live – or even virtually – before spending hundreds of thousands of dollars to purchase it.
Meanwhile, rival Offerpad is cultivating its own technological presence, but also continues to highlight its on-the-ground real-estate expertise as a selling point.
Source: Wall Street Journal (08/30/21) Forman, Laura
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