iBuyer Home Purchases Move Closer To Pre-Pandemic Levels

The number of iBuyer or "instant buyer" homes narrowed to 6.1% down year-over-year for the first quarter of 2021, according to Redfin. The report states that iBuying companies purchased 4,383 homes in the first quarter of 2021. 

The term “iBuyer” is used to describe real estate companies that purchase houses from homeowners in quick cash transactions by using algorithms to evaluate a property's worth based on comparable market data, according to Redfin. iBuyers typically charge sellers a higher fee than a traditional real estate agent would given the certainty of a cash offer with a flexible move-out day and the convenience of avoiding home prep, showings and open houses. These companies then make any necessary improvements to the homes and resell them.

iBuyers made up 0.5% of homes that sold across 418 U.S. metropolitan areas, down from 0.8% in the second half of 2019, but up from 0.3% in the fourth quarter of 2020. 

“Business really started ramping up in January and February. Since then, we've just had a constant barrage of deals,” said Allister Booth, an acquisitions specialist at RedfinNow in Los Angeles. “We're back to full speed and are buying more homes than we were last year. After we buy and renovate those homes, we know we'll be able to sell them because there are so many more buyers in the market right now than there are homes available.”

Read more about iBuying in the housing industry and how it works.