A new wave of companies and programs that buy homes from consumers quickly, for all-cash over the internet, known collectively as iBuyers, have been capturing real estate industry headlines for the last few years.
But that doesn’t mean independent real estate brokers need to sit on the sidelines. Lamacchia Development, a sister company to the Massachusetts-based indie real estate brokerage Lamacchia Realty, recently closed on its first home purchased through the company’s own iBuyer program, Offer Now, which launched in December 2018.
Anthony Lamacchia, broker-owner of Lamacchia Realty and CEO of Lamacchia Development doesn’t want to cede business to the growing number of well-funded iBuyer companies, including Opendoor, Zillow Offers and Redfin, to name a few.
“I know they’re going to come here and I want to beat them,” Lamacchia told Inman.
Unlike other brokerages, Lamacchia isn’t just connecting clients with investors who buy the homes — he’s actually buying the homes himself with his own business capital and a line of credit, with the idea of prepping them for market and re-selling them quickly.
“As of right now, having the right amount of funding to buy enough of these is the only thing holding me back,” Lamacchia said. “There’s a ceiling to how many we can afford to do.”
The company is about to close on its second purchase this week, and Lamacchia thinks they can hold about three to four homes at a time, currently. He’s started to think about outside funds to invest in more.
The main reason that Lamacchia first decided to offer this program is that he saw the droves of seller leads that Zillow Offers was bringing to Premier Agent customers (In addition to presenting prospective homesellers who visit the Zillow Offers website with an all-cash offer, Zillow’s iBuyer program also provides them with a comparative market analysis that comes from a broker or agent who also pays to participate in Zillow’s Premier Agent advertising program, allowing the agent to try and convince the seller to list with them on the open market instead of taking Zillow’s all-cash, instant offer).
“It does draw in motivated sellers,” Lamacchia said, noting that he’s comfortable disclosing his Offer Now program has brought in a couple of hundred seller leads to him to date.
Lamacchia has a background in construction, which he thinks gives him an edge on ensuring he gets a return on investment. On the property he’s about to close, there’s a need for a new septic system and he plans on redoing two bathrooms, the kitchen and adding a bathroom.
“This is not gutting the whole house,” Lamacchia said, adding that they hope to have the property back on the market by June 1.
“I come from construction,” Lamacchia added. “I’ve been a licensed builder since I was 21 years old. I grew up in the blue-collar world. To me, buying a house, re-doing a kitchen and a bath, those kinds of things aren’t scary to me at all. It’s just another day.”
Lamacchia said buying at a good price also ensures the return on investment is there. He said the company is upfront with people that they can sell the house for more, but in both cases, the homeowner valued the quick-close all-cash offer as opposed to listing on the open market.
Homeowners and prospective sellers interested in getting an all-cash offer — with a closing time of as little as three-weeks — can fill out a form with some basics details and set up an appointment on Lamacchia Development’s website.
Unlike other iBuyer services, Lamacchia Development does not charge any fees and the homeowner can leave whatever they want in the house. It’s purchased in, “as-is,” condition. Opendoor, for example, charges sellers an average 7.4 percent service charge. Lamacchia plans to make money off the difference in price between his company’s purchase of the home and the (hopefully higher) re-sale value of it on the open market, following repair, renovations and improvements.
According to Lamacchia Development, the seller from whom the company made its first iBuyer purchase first reached out in December. Lamacchia Development purchased the home for $440,000.
The seller had attempted to sell their home on the open market all throughout the autumn of 2018, but did not get any respectable offers and pulled it from the market, and became too discouraged to re-list it again this year. After several discussions with Mike McGrory, Lamacchia’s director of sales, they accepted Lamacchia’s cash offer in February and closed three weeks later, as planned.
“I know people are going to be concerned about the difference in a sale price with a Realtor and this type of program but let me tell you the peace of mind is worth it,” the homeowner, only identified as Mark from Watertown Massachusetts said, in a statement.
“After paying a Realtor having showings and inspections where things need to be repaired for the sale, keeping the utilities on and negotiating with a buyer over the sale price, the offer was not that far off,” Mark added.