The term iBuyer you may or may not have heard before as it is a very recently coined catch all term for large, well organized and technology driven companies that specialize in “flipping” homes. There are a couple big players already in many markets, including Orlando FL, like OpenDoor and Offerpad. With a dozen or more others in other markets around the country like Zillow Offers, Redfin Now, and several other large brokerage houses that have recently announced they too will be entering the iBuyer space.
You may be asking yourself how are these iBuyers any different from those yellow letters and postcards you get in the mail that say “I buy houses!” and the old agent marketing about “If I can’t sell it, I’ll buy it!” Well, not much. The main difference is the scale at which these new companies work on as they are typically backed by venture capital/wall street. They use big data to quickly make offers and have a MUCH larger marketing budget to get you to call them before you talk to a real estate agent. Otherwise, they are looking to buy low and sell higher.
They certainly have an appeal to some homeowners. Sometimes their offers are close to market value (minus their fees), however in 99% of cases a seller will net more money at closing selling traditionally vs. selling to an iBuyer. The main appeal then is a less stressful selling process (no staging, showings, cleaning, time on market, etc) a little additional certainty with their cash offer, moving assistance, and ability to choose a move-out date after the sale happens. For sellers looking to sell and buy at the same time, these conveniences can be valuable, but come at a cost.
So, should you consider selling to an iBuyer? Simply put, YES.
I know right?!! What real estate agent is going to say yes you should consider not letting me sell your home and go direct to an iBuyer?! Well, one who’s purpose is to help you find the best solution for you particular situation. For one, you have nothing to lose by requesting an offer from an iBuyer. It’s free and they make the process simple and quick. If their offer is too low, you at least have that number as a data point to keep in mind, you are never obligated to accept any offer.
What I would recommend you do though is first contact a real estate agent, preferably us of course, and just let us know you’d like to consider an iBuyer. We know that this is an option out there and that it can make sense for some sellers. Contacting us though allows us to prepare a complete picture of your options; how much you may net with an iBuyer vs. selling on the open market. We also can represent you when selling to an iBuyer, should you choose that route, for as little as 1%. Just like any buyer, especially investors (which an iBuyer is) they are looking out for their own interests, not yours. There are a dozen different ways they make a profit by buying your home and it only makes sense to have a professional on your side to level the playing field.
Which brings us to the drawbacks of selling to an iBuyer:
- They charge a “Service Fee” to cover their costs and make a profit to keep going. This can range from 6.2% to as high as 15%.
- Their offer is not likely to be full market value. Depending on how unique or not your home is, their automated offer system can be off from the true market price by just a few thousand, to tens of thousands of dollars.
- The offer is still subject to inspection of your home and they WILL go through it with a magnifying glass and they WILL renegotiate the price, deducting anything they deem needs repair.
- While their offers are solid, they are not guaranteed. iBuyers do back out of sales on occasion both because of inspection results with failed renegotiation’s, and for no reason at all.
- Your house has to meet their selection criteria. If your home is too old, not in their operating area, subject to a lease or otherwise doesn’t fit into their “box”, they won’t make an offer.
You can minimize some of these drawbacks, especially when it comes to the inspection renegotiation and sometimes the original offer price, by having an agent on your side. Additionally, we can bring in several iBuyers as well as local investors or even our own company to offer a quick sale option in situations that don’t fit into an iBuyers criteria (we specialize in tenant occupied property). Our only goal is to offer the best solution for your needs. Whether that be a quick sale to an iBuyer, a traditional sale on the open market for top dollar, keeping the home and renting it, and any situation in between we’re here to offer a complete solution. Not just a once size fits all.