Just days after Opendoor said it was resuming buying activity in some U.S. markets, several of its competitors have announced they too are making a comeback.
The re-emergence of iBuyers comes just weeks after analysts said the model was likely to be one of the first major casualties of the COVID-19 pandemic within the real estate industry.
iBuyers such as Opendoor operate a model wherein home sellers can request an instant cash offer on their property, thus negating the need to list it publicly. Sellers can choose to accept the offer, which usually comes with higher fees, or decline it.
Most iBuyers halted their buying activity when the COVID-19 outbreak took hold in the U.S., but many are now resuming operations
Last week, Redfin Now and Offerpad both said they will resume making all-cash offers to sellers. RedFin Now relaunched on Thursday in the Austin, Denver and Inland Empire markets, while Offerpad on Friday resumed cash offers on properties in more than 800 cities.
Redfin Now had temporarily paused making offers on homes on March 18, citing the coronavirus outbreak. But last week, Redfin CEO Glenn Kelman said in a conference call with investors that the main issue for the company wasn’t customer interest.
“We have never put anything on our website that homeowners responded to more eagerly than a cash offer,” Kelman said. “The issue has been just how we respond to that interest.”
The CEO said that when it halted its iBuying business in March, it owned or had under contract more than $119 million worth of homes. That number has now declined to just $56 million, most of which has been secured through a line of credit. Around two-thirds of that amount is under contract to be sold within the next two weeks.
The Redfin Now service has since been tweaked, with lowered instant offers and reduced hold times, the CEO said.
The company has also rehired 14% of its workers who were furloughed due to the coronavirus. In total, Redfin furloughed 41% of its agents.
As for Offerpad, the company said it’s working with HealthVerify to create a safety plan that can assure customers of an entirely contactless experience that includes virtual home tours, 3D walkthroughs and digital transactions.
“Through the last 30 to 45 days, we’ve received thousands of requests from sellers,” said Cortney Read, Offerpad’s senior director of communications, in an interview with Forbes.com. “So we know that the need is still there. People are still looking to buy and sell.”
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