Atlanta’s residential market has added a new player in the iBuyer business.
Coldwell Banker Residential Brokerage joined Offerpad, Opendoor and Knock in Atlanta last week with a program to give sellers a quick-cash option for their homes.
The brokerage has teamed up with cataLIST, a subsidiary of Chicago-based Home Partners of America, to buy the homes if a seller accepts the cash offer. The sellers can then close at any point within 90 days.
Barely a week into the program, Laura Rittenberg, Coldwell Banker’s Atlanta president, said there are deals in the process. “We’ve had a great amount of interest from homeowners,” she said.
The firm is tapping into a growing trend across the country, primarily in big metro areas where homes turn over more quickly. Opendoor, Offerpad and Knock are the most notable programs: Opendoor and Offerpad have been in the Atlanta area for a year and Knock for two years. Other iBuyers have been sprouting up across the country but haven’t yet entered Atlanta.
Each program is trying to take the stress out of the buying and selling experience by simplifying the process as much as possible using technology that incorporates complex algorithms.
Creating a seamless process
Coldwell Banker first rolled out its program in Dallas before coming to Atlanta. And this week, the brokerage introduced the program in the Tampa Bay area. Representatives are careful to note that the program is only through the brokerage’s owned offices, not its franchise firms.
Like Opendoor, Offerpad and Knock, Coldwell Banker has specific criteria for a qualifying home – age, location, lot size, home value – but $500,000 is generally the upper limit of the price range.
Opendoor and Offerpad have similar business models: They offer to buy the home and, once purchased, they do repairs and sell it for a profit to the companies. In a more traditional transaction, the homeowner would list the home and go through the selling process: doing repairs, cleaning and organizing, and leaving at a moment’s notice for a showing. Or, they can avoid all that by taking the offer and beginning the process of buying their next home, which could be one of the other homes the companies have bought and listed. The trade-off for the seller is getting a price that’s below what they would through the traditional listing process.
Knock does it a bit differently. The company buys the home the seller wants to move to, does the necessary repairs and helps move them into that new home. It also lists the seller’s home and once sold, the new home is transferred to the new owner and all repair costs are factored into the mortgage.
At Coldwell Banker, homes already listed with the brokerage don’t qualify. The program is all about getting new listings, according to Rittenberg. Someone looking to sell their home contacts a Coldwell Banker agent for the offer and signs a listing agreement. The seller receives an offer within 24 hours and decides between accepting the offer or going the traditional route. The agent receives a commission if the seller chooses the quick cash offer.
Rittenberg said price is one of the distinguishing factors over other iBuyers. Through cataLIST, Coldwell Banker doesn’t build in a profit margin for the sale of the home. Basic repairs will get done and perhaps the paint will be freshened up, which is reflected in the slightly higher price when Coldwell Banker sells the house.
“We believe our prices are going to be closer to market price than the other iBuyers in the market,” Rittenberg said.