Hello, LOs!
The news cycle this week has rightly been dominated by the demise of Zillow's disastrous iBuying program.
But if you dig a little bit deeper, I think you'll find that it's way too soon to write the obituary for iBuying.
Every mortgage company, brokerage, "power buyer," and iBuyer out there talks endlessly about the "end-to-end" transaction being the holy grail of housing.
The idea is essentially that a consumer finds their dream house through the company's listings portal, sells their existing home through it or with an agent already on the platform, uses the company's title arm and then receives a mortgage from the company. The company gets tens of thousands of dollars in fee revenue, instead of maybe just a cut of the real estate agent's commission or the origination fee and a bit more. Plus, the company now has some very valuable consumer data. iBuying still fits into that bigger picture, even without Zillow Offers.
On its earnings call Thursday, Rocket Companies CEO Jay Farner announced that the company is jumping in the iBuying pool, though not in the traditional sense.
"We are testing an iBuyer program. It will allow a client who may otherwise have a contingency on their approval to remove that contingency, and that's important in a competitive marketplace," Farner told analysts and investors. "Our decision with iBuying is to partner with actual iBuyers. We have a very capital light structure and we aren't in the business of purchasing real estate. The model that we have built is to bring on multiple iBuyers that have expertise and provide that as a service that will help a client buy a home and allow that third party to be there."
There aren't many proper iBuyers out there now – Opendoor and Offerpad are the only ones achieving real scale. So we'll be following this closely.
LOs, what do you think of this development? And where do you see LOs fitting into the ecosystem if iBuying is to stick around? Email me anonymously at jkleimann@housingwire.com.
James Kleimann
Managing Editor, HousingWire
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