iBuy, iRent, iLose

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Buying a home can be an awkward business. As a buyer, you have to align with a seller and a lender in what can be a tricky coordination problem. Brokers help to navigate this process, but they can’t eliminate the friction entirely. It’s no wonder homebuying ranks as a particularly stressful life event. 

Over the past ten years or so, two models have emerged in the US to address the problem. The first, direct approach, is the iBuyer model. Companies – known as iBuyers – have emerged to take on the role of market maker, putting up capital to buy homes directly from sellers and sell homes directly to buyers from their inventory. The model came under scrutiny over the past few weeks after one of the largest players, Zillow, suffered large losses and announced it’s pulling out. It’s not an easy business to get right. 

The second, indirect approach, is to make the alternative – renting – a better experience. The number of single-family rental households in the US is close to 17 million. A cla…

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