May 29 2019
iBuyer companies have become increasingly common in our market, but this supposedly convenient way to sell is actually more trouble than it's worth.
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You’ve probably heard of companies like Opendoor and Offerpad, which claim to offer a fast and convenient alternative to the traditional home selling experience. However, is working with one of these “iBuyer” companies really the best way to go about selling your property?
Actually, there are some significant drawbacks to this arrangement.
One of the most obvious disadvantages is that you’ll earn less for your home. These companies use automatic valuation tools, like the one behind Zillow’s highly inaccurate Zestimate feature, to determine the price they’ll pay for your home. Usually, this figure is between 10% and 20% below your home’s fair market value.
So why would anyone work with an iBuyer? Well, in fairness, selling outright to one of these companies can be a more expedient option than listing on the open market. Sellers in urgent need of a fast sale may look to iBuyers as a convenient solution.
Actually, there are some significant drawbacks to this arrangement.
One of the most obvious disadvantages is that you’ll earn less for your home. These companies use automatic valuation tools, like the one behind Zillow’s highly inaccurate Zestimate feature, to determine the price they’ll pay for your home. Usually, this figure is between 10% and 20% below your home’s fair market value.
So why would anyone work with an iBuyer? Well, in fairness, selling outright to one of these companies can be a more expedient option than listing on the open market. Sellers in urgent need of a fast sale may look to iBuyers as a convenient solution.
At the end of the day, iBuyer companies are nothing more than glorified house flippers.
” This sounds great in theory, but there is a catch. Even if an iBuyer’s initial offer seems reasonable at first, you’ll find that they compensate for this by charging a 6% to 13% “convenience” fee. In other words, not only do iBuyers offer less than you could earn by listing with an agent, they also charge more than a typical Realtor’s commission.
To give you an example, take the story of one of my past clients. This client had a home worth approximately $325,000. The iBuyer company they were thinking of working with came in with an initial offer of $318,000, which, at first, my client was thrilled about. It was only when they noticed the fine print in their contract that they learned this is not the figure they would ultimately earn. Not only was the iBuyer going to charge them a 7.5% convenience fee, but they were also going to knock the price down based on issues found in the home inspection. When all was said and done, this would have amounted to a $33,000 reduction from the initial offer price.
At the end of the day, iBuyer companies are nothing more than glorified house flippers. If you truly want a fast, convenient deal, then reach out to my team and me about our guaranteed home sale program. Essentially, we guarantee we’ll sell your home in 39 days or less, or we’ll buy your property ourselves.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.
To give you an example, take the story of one of my past clients. This client had a home worth approximately $325,000. The iBuyer company they were thinking of working with came in with an initial offer of $318,000, which, at first, my client was thrilled about. It was only when they noticed the fine print in their contract that they learned this is not the figure they would ultimately earn. Not only was the iBuyer going to charge them a 7.5% convenience fee, but they were also going to knock the price down based on issues found in the home inspection. When all was said and done, this would have amounted to a $33,000 reduction from the initial offer price.
At the end of the day, iBuyer companies are nothing more than glorified house flippers. If you truly want a fast, convenient deal, then reach out to my team and me about our guaranteed home sale program. Essentially, we guarantee we’ll sell your home in 39 days or less, or we’ll buy your property ourselves.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.