Power buyers are real estate companies focused on empowering homebuyers. Their services differ from company to company, but power buyers can typically guarantee your home sale and help you become a cash buyer.
The real estate market is (still) hotter than ever.
While that’s great for home sellers, many buyers have struggled to break into the competitive market. This is especially true for first-time homebuyers and homeowners who lack the liquid capital to put a down payment on a new home.
Enter power buyers.
These property tech companies have carved out a space in the real estate industry to enable buyers to compete in the hyper-competitive market. But how do they do it?
Power buyers are companies that level out the playing field in a hot real estate market by leveraging their own capital. They can increase the purchasing power of homebuyers by arming them with services like cash offers, bridge financing, and trade-in programs.
The term 'power buyer' was coined by Mike DelPrete, a real estate-tech strategist and scholar-in-residence at the University of Colorado Boulder, who wanted to differentiate power buyers from other real estate business models like iBuyers.
iBuyers, or “instant buyers,” are companies that use algorithms and other digital technologies to buy and resell homes quickly, speeding up a traditionally elongated process. They rose to prominence in the mid to late 2010s and make money from service fees, which are typically 5% to 7% of the sale price.
iBuyers often entice sellers with cash offers and fast closing times, and operate without real estate agents, but there can be a cost to the convenience. iBuyers typically offer a lower purchase price than if the house had been listed on the MLS. The rate can vary by market and year, but an analysis of 2021 iBuyer offers found that iBuyers offered as much as 104% of fair market value for homes to as little as 99.4%. In today's competitive market, many sellers are able to sell their homes well above market rates.
After making some light repairs on a home, iBuyers will list and sell the property for more than they paid.
While many people are satisfied with traditional agents, the unprecedented market has created frustration, confusion, and difficulty for many prospective homebuyers. Power buyers provide a solution in the face of record-high home prices and low inventory. These companies upend traditional real estate models by unifying the tasks and transactions for homebuyers and sellers. Not only do they simplify a notoriously complicated process, the services offered by power buyers also give their clients and customers an edge.
The seller has all the power in a hot market with high demand. Unless you’re an investor with ample liquid capital, you will likely have a hard time competing with the offers of other buyers. The National Association of Realtors reported that in February of 2022, nearly five offers were received for every property sold.
Power buyers can help by transforming you into all-cash buyer. This is one of the principal services of power buyers and one that comes with many advantages in today’s competitive market.
Find out why cash offers are better.
You might benefit from working with a power buyer in real estate if it's a seller's market, you're juggling listing your home while trying to find a new one, or if you’re simply looking for a streamlined and integrated service.
Power buyers, like Orchard, can help you become a cash buyer, buy before you sell, and list for top dollar on the market — guaranteeing a sale — all for the same fee as traditional agents.
As you look for a real estate agent and begin your home buying or selling process, consider booking an appointment with a power buyer to see what services they have to suit your needs.
When you list with Orchard, we’ll get your home show-ready and make repairs to increase your home’s value at no upfront cost.
Orchard guarantees your home will sell, so you can buy your next one worry-free.
We provide peace of mind that your home will sell, plus list your home on the market to maximize your earnings.
Use our home sale calculator to estimate your net proceeds.
Our Home Advisors are experienced local agents who know how to sell for top dollar and help win your dream home.
All Orchard Home Advisors are experienced agents who know your local market inside and out. Request a consult today.
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