After a momentous year for iBuyers, where do instant offer companies like Offerpad, Opendoor and Redfin Now go from here? All February, Inman will dig into iBuyers to determine what the new year has in store, where opportunities lie for real estate agents and what brokerages should expect. It’s iBuyer Month at Inman.
If you would like an entirely new way to generate more leads that work in print, on social media, and using video, there’s a new type of iBuyer in town known as “Power Buyers.” Power Buyers can turn buyers who need financing and/or a contingent sale into cash buyers, as well as turning renters into homeowners.
In 2019, I interviewed Darryl Davis for my weekly podcast. Davis is a top industry speaker, trainer and Inman contributor. During that interview, he argued that iBuyers are really “iInvestors” who seek to purchase properties at wholesale prices. In contrast, competent Realtors focus on helping sellers obtain the maximum retail price for their property.
To illustrate how costly the iBuyer model can be, before we listed my brother’s house in California, I obtained an iBuyer offer from Opendoor of $763,000. We ultimately sold for $855,000. Using Zavvie’s side-by-side comparison of selling with Opendoor vs. a traditional sale, we netted an extra $83,720 by doing the traditional sale.
iBuyer vs. Power Buyer
According to Opendoor:
An iBuyer is a company that uses technology to make an offer on your home instantly. How iBuyers operate varies, but the underlying idea is that a company estimates the value of your home and makes an offer. If you accept, they take on the burden of owning, marketing, and reselling the home.
While iBuyers rely on acquiring properties at a wholesale amount and then reselling them for the retail value, a sub-category of iBuyers called “Power Buyers,” offers a retail model for most sellers. In many cases, agents who use these models also receive a full commission.
To understand the differences between the two models, watch the two short videos below.
- The first video is a testimonial from a move-up buyer where the homeowners sold using the Homelight iBuyer “Simple Sale” model.
- Now compare the video from Knock, a Power Buyer that qualifies the buyer for a loan and advances them the down payment so they can purchase right away without selling their present home first. They also have a program that helps buyers pay “all cash.”
2 Power Buyer models
Here’s how Clelia Peters described the two primary types of Power Buyer models at Real Estate Connect in 2021:
There are two models or goals these companies hope to accomplish: They either turn a buyer into a cash buyer or turn a seller into a buyer. They earn their money through spreads, that is the value of the home when they buy it versus the value at which they sell it. This may be in addition to a premium paid for using their service.
These companies market directly to consumers and are especially interested in working with real estate agents.
Companies such as Accept.inc, EasyKnock, FlyHomes, HomeLight, Homeward, Knock, Opendoor, Orchard, and Ribbon provide different versions of these programs.
5 Power Buyer marketing campaigns to supercharge your lead generation
To use any of the five marketing campaigns below, complete the three steps below first:
- Research which Power Buyer programs are available in your area including the price ranges they typically include. (These programs are often tied to entry-level and median-priced properties.)
- Review each program available in your area so you will be prepared to explain how it works to any leads you generate.
- Decide how you want to use these campaigns — print marketing, digital marketing, on social media, email to past and present client lists or using a video campaign on Instagram, TikTok and/or YouTube.
Campaign #1: Buy your next home without selling your current home first
The most important feature of most Power Buyer models is they solve the contingent sale problem. Rather than forcing homeowners to sell their current home first and risk living in a rental or having to carry two mortgages, these models allow the seller to purchase the property without contingent financing.
Ready to Buy but Need to Sell Your Current Home First?
Learn how to buy now before selling your current home!
Contact Sally Agent at 800-555-1212
Campaign #2: NO! You Don’t Have Sell Your Current Home Before Buying Your Next Home
When you market using print, you have 1-2 seconds to capture the reader’s attention. The word “NO” is an especially powerful attention grabber and is extremely effective in most types of print marketing as well as in online ads.
NO!
You Don’t Have Sell Your Current Home
Before Buying Your Next Home!
Contact Sally Agent at 800-555-1212 to learn how
Campaign #3: Get reluctant sellers off the fence
A major concern many sellers have is whether they will be able to find a replacement property once they sell their current home. The Power Buyer model that works exceptionally well in this case first qualifies the potential buyer for the financing they need. Next, the Power Buyer purchases the replacement property with an all-cash offer. Once the potential buyer ultimately sells their existing home, the Power Buyer sells them the replacement property.
You Can Buy the Right Home for You Now
Better yet, you don’t have to list your property first!
Contact Sally Agent at 800-555-1212 to learn how
A point to note about the above script: the statement “Buy the right home for you” is an embedded command telling the buyer to “buy now.”
Campaign #4: Stop Losing Out on Multiple Offers!
This is a great campaign for weary buyers who have made offers on multiple properties and lost because they either had a contingent sale or had to obtain financing. While you can use the language below for your general marketing campaigns, an even better approach is to meet with all your past buyers who have lost out in multiple offers and explain how they can now pay “all cash” with a Power Buyer program.
Stop Losing Out on Multiple Offers!
Join the ranks of cash buyers now
Contact Sally Agent at 800-555-1212 to learn how
Campaign #5: Help renters become homeowners
In today’s era of rapidly increasing prices, increasing interest rates, and annual rent increases of up to 25 percent, helping renters become first-time buyers now will save them tremendous amounts of money.
A brand-new category of Power Buyer are so-called “rent-to-own” programs. Divvy Homes and Landis purchase the home for the renter and then allow the renter to live in the home while they save for a down payment. According to the Divvy website:
Rent your dream home while we help you save for a down payment. You can buy the home from us whenever you’re ready or walk away and cash out your savings.
Here’s the campaign:
Renters: You Won’t Believe This!
Rent your dream home while saving for the down payment.
Then buy it when you’re ready or walk away with your savings!
Contact Sally Agent at 800-555-1212 to learn how
Stand out from the competition
If you want to stand out from the competition with a unique approach to generating leads that will get buyers and sellers contacting you to learn more, adding a Power Buyer strategy to your toolbox for 2022 is one of the smartest moves you can make!
Bernice Ross, president and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.
