The emergence of iBuyers has grown rapidly in the past year and has the potential to make a huge impact in the real estate industry. Web-based real estate platforms like Opendoor, Zillow and Offerpad have started offering online home selling services known as “iBuyers”. iBuying is short for “instant buying”, because the transaction is online and requires no personal contact. iBuyers profit by purchasing the homes below market price and then reselling them later.
Why iBuyers Are a Bad Idea for Home Sellers
While iBuyers can make the home selling process seem convenient and easy, there are hidden downsides. For most home sellers, a quick process would be great, but these negative aspects typically hold more weight than any benefit.
Low Ball Offers
The strategy of iBuyers is to make an offer that is below the market value of a home so they can turn around and sell it for a bigger profit. iBuyers offer an average $15,000 less than what a home could potentially sell for through the traditional listing process.
The average difference in potential home sale price versus what iBuyers offer is about $15,000.
High Transaction Fees
iBuyers’ fees range from 7-13%, which is much higher than the cost of commission fees for traditional real estate sales (usually 6%).
Some iBuyers will make an offer with a contingency that the seller is responsible for any repairs that they deem necessary. This sounds like a typical part of a real estate transaction, however there some iBuyers have been known to require the seller to formally agree to the offer before disclosing the cost of repairs. Now the seller is stuck with a huge bill for a repairs on the house that sold under market value with high closing fees.
Using iBuyers Could Cost You
If you’re in a hurry to sell, most real estate agents can sell a property that’s priced under market value in a fairly short amount of time – and they don’t bill you for repairs or charge outrageous closing fees. And since agents make a commission based on the sales price, they are motivated to get you the highest price for your home. Agents can also help you find a new home!
If you’re thinking about using an iBuyer to sell your home, take your time and consider all the pros and cons. Do some research and read about other peoples’ experiences. In most cases you’ll find that using an agent is the better choice.
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Prince William County
Lambert Home Inspections
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Bristow, VA. 20136