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Published Oct 10, 21
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Courtesy of Redfin If you're looking to sell your home and avoid people tromping through your living room at open houses, there's a new option that's becoming popular in many parts of the country. Companies called i, Buyers, or instant buyers, use computer algorithms to make you an offer, often within a day.

The way it works is that companies such as Redfin, Zillow, Opendoor and Offerpad will make you an almost instant offer over the Internet. They then send an inspector to take a closer look. Their sales pitch is they'll move very quickly and buy a house with very little hassle.

In Phoenix, Charlotte and Atlanta, i, Buyers account for more than 5% of sales, according to Fairweather. She says in many of these same places i, Buyer sales have doubled from the year before. Redfin's i, Buyer service, Redfin, Now, is also purchasing homes in Southern California. That's where Janet Jenkins was living until recently, when she and her husband separated.

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And they decided to sell their home outside Los Angeles. Janet Jenkins' rainbow lorikeet parrot named Malibu shows off his leg-lifting trick. Having parrot and dog cages in the house, not to mention the animals themselves, was one reason Jenkins decided open houses would be a hassle and selling to an i, Buyer was a better option.

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Having parrot and dog cages in the house, not to mention the animals themselves, was one reason Jenkins decided open houses would be a hassle and selling to an i, Buyer was a better option. Janet Jenkins She wanted to get it done quickly. And listing through a broker and hosting open houses wasn't a great option for Jenkins.

And her husband was still living in the house with some of them. One of her parrots, Wrangler, happily squawked away during her interview with NPR. She knew that real estate agents would want the animals and her estranged husband out of the house. "The parrot is not my husband's favorite pet," admits Jenkins.

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The house also needed some repainting and new carpeting. She didn't want to deal with that. "And so I started looking up homebuying services and ran into Redfin," she says. The economist Fairweather says Redfin, Now can get you the money for your home in as little as a week.

"So they can time it perfectly with their move," she says. After buying houses, the i, Buyers fix them up a bit and then try to quickly sell them again for a profit. In Jenkins' case, she went online and answered some questions about her house. Redfin's computers ran their algorithms and the company made her an offer for about $500,000.

So did two of her close friends who are Realtors in the area. "So I pushed back," Jenkins says. It was a friendly negotiation. She made a case that her property had several advantages to others that had sold recently in her complex. A bigger backyard for one thing. Redfin then made her a better offer — and they had a deal.

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But she'd already moved across the country. "You do leave money on the table," Jenkins says. "And while we did, we didn't leave that much." Redfin does get a fee like a regular Realtor commission, but it didn't say what the average profit is on the houses it buys and then resells.

He says the i, Buyer approach works in places where houses are similar. For example, the places where a lot of these i, Buyer sales are growing quickly like Phoenix, Las Vegas and Atlanta. These markets have sprawling subdivisions with many houses that are almost identical. "There's not a lot of difficulty in pricing those houses," Wheaton says.

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But you can do statistical modeling of that and just nail it, be 99% correct in predicting the price." And he says that means i, Buyers can offer you just a little less than what the house is worth and still be confident they can sell it for a little profit.

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Many older cities have some houses that are newer, some older, some renovated, some not, different styles, all mixed up in close proximity. Prices can be all over the place, and so in those areas, Wheaton says, "the i, Buyers have to be really, really careful." He says being careful means they'd likely offer you a very lowball price because they aren't really sure what your house is worth and they don't want to lose money.

In places like that, Wheaton thinks i, Buyers could keep growing dramatically and really change the way homes are sold in large parts of the country.