Here’s a look at iBuyers and why you may or may not want to sell to one.
You may have heard the term “iBuyer” before and wondered what it meant. iBuyer is defined by Zillow as, “A company that buys homes almost instantly by relying on technology to determine a market-based cash offer. iBuyers complete the purchase transaction online, often sight unseen, which means the homeowner gets to sell their home in a quick sale while skipping a lot of steps in the traditional home-selling process.”
Why would a homeowner choose to sell to an iBuyer? There are a few key reasons. IBuyers appeal to sellers who don’t want any hassle. With an iBuyer, you don’t have to stage the home, hold open houses, make repairs, or do anything else besides move. Sellers don’t have to worry about financing because iBuyers are paying in cash, and the time frame is usually flexible.
What are the negatives? For one, the home’s value could be altered because it’s not on the market. Its “market value” might be a lot less than what you would get for the property if you sold it on the open market. Additionally, there will be fees involved from the iBuyer. They’re in the business to make a profit, so they’ll either discount their offer or charge fees as high as 10% for repairs.
The big iBuyers out there right now are Opendoor, Offerpad, and Redfin. For a while, Zillow was in this business too. However, they decided to get out in November because they had a backlog of over 10,000 homes that they couldn’t fix up in time to sell. They lost so much money that they stopped the program altogether.
The bottom line is that you need to do what’s best for your family. If that’s selling to an iBuyer, so be it. If you have any questions for me about what your home would be worth on the open market, what it’s worth to an iBuyer, or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.