iBuyer Pros:
• Convenience- no showings, no open houses, no making beds and no kenneling animals while on the market
• Time- you choose your closing date typically within a 60 day range
• Cash offers- no buyer contingency on selling another home or financing
• No repairs- although you’ll still be paying for repairs, the burden for completion falls on to the iBuyer
• Low risk- can backout anytime without penalty
iBuyer Watchouts:
• Small price guardrails- iBuyers typically only buy/sell homes under $500k
• Sale Price- since these companies want to turn around and sell your house for a profit, you will most likely get a slightly lower than market value offer on your home
• Convenience Fee- a premium for the iBuyer’s services is 7-11% of the home price vs. traditional transactions that would cost the seller ~5-6% in commission
• Repairs- iBuyers will deduct repairs from your proceeds but they often estimate these at a premium and complete them on a budget, you’ll likely save if you hire and complete repairs yourself, which isn’t an option with iBuyers
• Renovation- if your home needs a lot of work iBuyers likely won’t take it on. They will complete things like painting and re-carpeting, but nothing more significant like new cabinets, counters, etc.
• Closing Costs- all the offers I’ve seen have a 1-3% closing cost which isn’t too far off from a traditional transaction, but I’ve heard they can go up to as much as 5-8%, so make sure to look for that
Good candidates for iBuyers:
• Your home is in decent condition
• You expect your home is worth less than $500k
• You’re not looking for top dollar
• You have pets or small children that would make home showings disruptive
• You want to purchase a home and need to sell fast to avoid a contingent offer
One of the biggest fears of iBuyers in the real estate community is that Realtors will go the way of the Taxi drivers. Is there a chance that could happen? Yes. Is it likely? Most certainly not. Today iBuyers make up about 5% of the market. I view iBuyers as another option to help serve my clients better. If your home meets the parameters, and you’ll benefit from the convenience of this type of sale in one way or another then I’m more than happy to help guide you through the process. I view my job as a real estate consultant and being an expert on all the ways I can help make home and investment ownership easier is my goal.
One Comment
Great info Linds! We have a few of these in our neighborhood and I was wondering how it worked. Thanks for doing the research!
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