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Why iBuyers Can’t Succeed Without Reliable, Real-Time Data

May 1, 2019
Property Analysis
By: Jason Holte

iBuyers are poised to disrupt the real estate industry, but it will take more than capital and name recognition to corner the market.

If you’re unfamiliar with the term “iBuyers,” a recent Propmodo article outlines the business model as the use of data insights to identify homes with high investment potential and make instant, fair-market offers to homeowners. Many of the biggest players in the online real estate industry, including Zillow, Redfin, and Offerpad, are either considered iBuyers today or scaling their capabilities significantly.

Hero: Why iBuyers Need Reliable, Real-Time Property Data to Succeed

An industry expert cited in the Propmodo article predicts that iBuyers will represent 60% of home sales by 2025. Zillow, Redfin, and Offerpad all possess the name recognition, organic traffic, and capital to successfully disrupt the homebuying process as we know it, but where their advantage truly lies is in their use of data to build automated valuation models (AVMs). Here is the role that current, accurate location information plays in enabling iBuyers.

Related: Redfin Chooses Digital Map Products to Deliver Parcel Information

What Data Do iBuyers Need?

As Propmodo notes, Zillow in particular has invested heavily in the infrastructure needed to acquire data and build the AVMs that iBuyers require. There are any number of data points that need to be collected on a national scale in order to create reliable AVMs. Factors such as assessed values, complete transaction histories, crime data, neighborhood-level demographics, and many more will all help determine whether a home represents a good investment.

Gathering this data from disparate sources can be a challenge. The amount of information needed can take time to collect, be costly to acquire, and may not be completely up-to-date. However, if iBuyers can locate a single source of current, accurate data to inform their AVMs, then these challenges can all be easily addressed.  

How the DMP Location Intelligence Platform Can Help

Our comprehensive suite of web services and APIs, SpatialStream®, can help iBuyers obtain the information they need to build the AVMs that will inform their purchase decisions. Using SpatialStream, iBuyers can stream SmartParcels®, our nationwide parcel database, into their systems in real time. SmartParcels ties over 300 property and tax attributes to parcel boundaries, which means that deciding factors such as assessed value and transaction history for any property under consideration are instantly accessible when that property is searched. By streaming SmartParcels rather than manually uploading the data, the systems used by iBuyers receive new information as records are updated in our system. And for other environmental factors that may contribute to an AVM, SpatialStream can also be used to stream additional map-ready content such as flood, natural hazard, and demographic information without the need for data processing or warehousing.

To learn more about how SpatialStream can help online real estate companies become successful iBuyers, schedule a demo today or contact us for more information. You can also download a sample of our SmartParcels data by filling out the form below, or download our solution sheet for the online real estate industry.

Download a Parcel Data Sample

Fill out the form below to download a sample of our parcel data!