6C —April 24 - May 14, 2020 — Spring Preview — M id A tlantic Real Estate Journal
www.marej.com
T echnology
By Jesse Shemesh, Point Acquisition How iBuyers and technology are changing the real estate market
T
he real estate market is affected by multiple factors: the money sup-
online platforms. How do these companies change the equation? Do their stream- lined procedures make suc- cessful closings more likely or less so? And finally, can these companies entirely replace the traditional broker/agent? Such questions warrant a closer look at these internet- based enterprises. How Do iBuyers Work? These programs, such as our recently launched iBuyer platform and Zillow’s Direct Offers make instant cash of- fers on properties that are submitted through the plat-
form. Through a combina- tion of internal computations, proprietary models and data, market cap rates, comparable sales/leases and price psf computations, in junction with owner-supplied information, input from real estate service providers (architects and zon- ing attorneys), and on-site in- spections, we come up with an offer in as little as 48-72 hours. Advantages Over Traditional Brokerages iBuyers are a potentially attractive option for sellers because they have the cer- tainty of selling their property
to qualified buyers who have the wherewithal and financ - ing to close. They might not be getting top dollar (a good comparison would be selling your car back to a dealer ver- sus a private-party sale), but sellers could be out of their properties faster thus saving money on holding costs (time is money). Other advantages to the iBuyer process include less aggravation and hassle, limited showings and foot traf- fic, and most importantly the savings on transaction costs (commissions). It ends up being a zero sum
game for many sellers or at least a much more fluid and improved sales process. Many times in commercial real es- tate, it is more valuable to have a qualified buyer and be direct with them rather than selling for a few percentage points higher, especially when you do not have to pay a com- mission. Our iBuyer system is prin- cipal to principal, which is ad- vantageous to both buyers and sellers as it saves dramatically on transaction costs and issues can be resolved directly be- tween parties versus using an intermediary. Another added benefit is that you receive an offer in as little as 48-72 hours upon submitting the informa- tion document requests, this will help you better under- stand your valuation versus a broker or auction house who uses blind bids thus making it very uncertain where the sales price will end up. Our Process We provide an open and hon- est valuation process, there is no over promising and under delivering that many sellers have grown accustomed to via dishonest players. Don’t get me wrong, there are many fantastic brokers out there who sell in high volumes and understand their market, but for every one of them there is a handful of not-so-competent brokers looking to get a listing agreement signed by promis- ing the sky, then trying to beat you down to a lower price and accept an offer. It has all happened to us before and since you have 6-12 months of exclusivity, you may end up accepting the offer that did not meet your expectations since you have no other options. The best part about the iBuyer platform is that it's a no cost, no obligation, non exclusive arrangement, which is the biggest competitive ad- vantage and compliment we receive from users. The COVID-19 Impact on iBuyers Recently, the iBuyer players have all called off their pro- grams given the CoronaVirus pandemic, however, there are still a few companies that remain. Our company, Point Acquisitions, is one of those companies. The reason we are able to survive is that we partner with high net worth individuals, family offices, pri - continued on page 16C
ply, employ- me n t , d e - mographics, and the Fed- eral Reserve Sy s t em t o name a few. Th e s e d e - terminants have l ong
Jesse Shemesh
histories with the buying and selling of property. However, in recent years, technology inserted itself among market variables in the form of iBuyer
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