HomePrezzo here. I’m at the Inman Conference in Las Vegas. Back in January, I was here in New York, it was like minus 30 degrees. Over here, it’s been like 42 degrees every single day. Yesterday and the day before, the big theme of the conference has been around iBuyers. So what is an iBuyer? It’s a little bit of a misnomer because it’s really an i-Seller. An iBuyer is a proptech or a startup that is buying properties straight out. So they turn up with a cash offer and they do that based on the valuation of the property, rather than the sale price of the property. So with one click, you’re able to as a seller, see the value of your home and they will pretty much turn up within 24, 48 hours and pay you cash for it. They then renovate and improve it and flip it, and that’s kind of where they make their money.
So there’s public companies in this space that are doing it. Opendoor started it as a startup that disrupted the space, but then the big boys, Zillow, the big portals over here are now starting to do it. And so the debate, because this is been going on for a couple of years now, in the US has been around, what do agents do about it? In the US, you’ve got to remember that commissions are the equivalent of about 6%. There’s 3% on the sell side, 3% on the buy side. So, if the valuation is coming in at around sort of 12% and under, but you don’t have to stage the home, you don’t have to get it ready for sale, you don’t have to do anything. All you have to do is literally pack up the gear and go and you’ve got the cash in the bank.
That’s an attractive option for some sellers. But what we’re seeing is that the agents are now using those offers to basically say, “Well look, here’s what you could get right now, but here’s what I think you should get.” And so they’re using them as like a valuation to help people see the value of their home before they then pitch what their appraisal price is. So it’s an interesting development.
It’s probably going to come to Australia in some shape or form soon. Even if what it is, is sort of being able to see the valuation of your home, which you can do on some sites now anyway. But it’s to give you an idea of what your home would be worth right now clear. Things stamp duty, and things like our different pricing structure around commissions make it a bit different. The debate is whether you’re going to actually be losing 20% or up to 30% if you take a walk away price. But in markets that are slower and markets that take longer to transact, sometimes it’s the option of it is, is really great. So that’s been the first couple of days. We’ve been here on the HomePrezzo stand and we have been so busy. It’s crazy. But I’ll report in tomorrow and let you know what we found out today. Thanks.