This study investigates the recent dynamics of dealer intermediation in the US housing market, with a specific focus on the iBuyer business model. iBuyers, acting as intermediaries, offer instant purchase options to home sellers based on a pricing algorithm. Initially aimed at assisting individual sellers burdened by the complexities of listing and selling, this model has seen significant losses, leading to many iBuyers withdrawing from the market. The paper explores the concept of ’unobserved quality’ of houses – aspects not evident in historical transactions or listings but noticeable to buyers and sellers upon direct property inspection. I analyze the impact of severe adverse selection linked to these unobserved qualities, particularly when targeting sellers with high hassle costs, using data on discounted offer prices. Furthermore, this paper proposes a redesigned contract that addresses the adverse selection dilemma, enticing sellers with properties of superior unobserved quality to opt for iBuyer services, thereby fostering market sustainability. This research has broader implications, particularly for sectors like insurance, highlighting how overlooking private information in one type dimension can lead to poorer election in other dimensions of type.