What is a iBuyer or iBuying service?

May 20, 2021

The i in iBuying or iBuyer stands for immediate. This means that a company or person offers a cash price for a property, this can even be site unseen. iBuyer's in New Zealand have been around forever, individual property flippers and companies make a living out of finding off market deals, offering a cash price, doing renovations and reselling for a profit. This is not a new concept, however the scale in which this new wave of iBuying companies are operating at is what is groundbreaking. The first company to introduce this new era of iBuying was OpenDoor then followed by Zillow and Offerpad and many others operating at a lower volume. 

Where is iBuying popular?

iBuying has the biggest following in the USA followed by the UK. The US market in particular has embraced this proptech, likely in part by the fact that the buying and selling process is so complicated, especially compared with New Zealand. This coupled with the fact that the USA has a few markets that are red hot and have been for some time, means that the risk associated with iBuying is reasonably low.

What are the benefits of iBuying?

In a fast moving real estate market, iBuying can be a massive benefit to both the buyer and seller. 

From a sellers perspective, getting a cash offer with no conditions is very attractive. This is made even more tempting by the fact that you know the offer is in line with the market, you don't have to go through the stress of renovations, open homes, negotiations and all the costs associated. 

For the iBuyer in New Zealand this all comes down to some clever maths. By analysing a market, an area or even a street, it can be predicted with only a few variables being input what a property is worth. Even more so, they can predict what a property is worth right now, but also what it will be worth with renovations, marketing or even holding for the best time of year. The key to iBuying is using both data and local knowledge to be able to offer a fair price to the seller, but to also work within the goal margins. With this method, iBuyers can scale as quickly as they can raise funds and de-risk (in a buoyant market) with volume. As we have seen during the global pandemic, many iBuying companies have been left exposed, with jaw dropping amounts of assets on their books and no one to buy them, let alone to buy them at the previous market price. 

Could iBuying work in New Zealand?

It's unclear if iBuyer's in New Zealand could ever operate a functioning industry even close to those that are already established overseas. In order to be able to gain the confidence needed in a market to offer on a home without in depth knowledge, more data might be needed. It's pretty tough to tell. The other key boundary is capital. There would only be a few players in New Zealand (or Australia) who could front the amount of money required to get this underway and the risk to the reward might not be there. As we get more data and the housing stock in NZ continues to improve with more new builds and apartments where values are more predictable, we might see this idea catch on. Until then, Kiwi’s will likely just continue to operate the way we have been for the last few decades. 

Search for iBuyers and buying agents on propertydirectory.co.nz


Submit your listing to property directory to be seen by Kiwis. Propertydirectory.co.nz is proud to list NZ business and services to help Kiwis find you.

Latest posts
What You Need to Know About Low Mortgage Interest Rates
October 2, 2021

Mortgage rates are at historic lows, and many people are wondering what this means for them. If you're considering buying a home, it's important to understand the current mortgage interest rates so that you can make an informed decision. This blog post will go over some of the most significant trends in low mortgage interest rates, as well as what they mean for your finances.

Continue Reading
Getting Your Home Ready To Sell, Tips for Selling and Marketing your Home
September 29, 2021

This article will provide you with a lot of helpful information that can be used in the process of selling your home. It will cover topics such as how to advertise, what an agent does and the types of things best to do in order to sell your property quickly.

Continue Reading
What is a buyer's agent in real estate and are they used in New Zealand?
September 21, 2021

For a prospective property buyer in New Zealand to employ a buyer’s agent, typically they will require their services to find and help close on the right property. A buyer will expect the agent to use their experience, contacts and local knowledge to find properties both on and off the market that best fit the buyers needs

Continue Reading