What is an iBuyer?
An iBuyer is a company that buys your home and then (usually) resells it.
Instead of listing your home traditionally with a real estate agent, waiting for offers, accepting showings, and going through a long escrow, the iBuyer offers to cut out all the hassle by buying your home themselves.
They turn around and sell it themselves, putting up with the hassle of getting it ready, listed, and sold to a traditional buyer.
That sounds great, right?
The catch, of course, is that it will cost you a little something. You will seldom get the same amount of money you would have if you had listed your home traditionally, soliciting top dollar from area buyers.
It’s a big debate right now. iBuyer companies are popping up everywhere and some are growing and some have said bye bye (Purplebricks).
As a Real Estate Agent, I found the Purplebricks commercials ads very frustrating, demeaning and a disservice to the public. They berated the Real Estate Agent, boasting flat fees, etc, etc. But….wait….when you hired them to sell your house, who did you have working for you? Yup, a Real Estate Agent. If we are so bad, then why where they hiring us to help them? And they got into alot of trouble…..just search it on google!
Anyways, back to the reason for this post. I have personally looked into some of the ibuyer companies and founds lots of misleading information to what they promise and what they actually deliver.
Check out the depth report on ibuyers from Collateral Analytics
In some instances, it’s been reported that some of the ibuyer companies ended up costing the seller 2-3 times more money than if they simply used a traditional Real Estate Agent. In all, the typical average costs to the seller appears to be between 8% to 16% depending on the iBuyer vendor the seller chooses.
In contrast, the costs to using a traditional Real Estate ranges between 5.5% to 7.5%
Open Door represents its service as more affordable than a real estate agent. Not sure who does their accounting! In the information I received, their costs far exceeded the costs to hiring a traditional real estate agent.
For some, needing a quick sale or quick cash, this could a good way to go…but it’s at a cost. Not only do the fees add up quick the offers are usually substantially lower than what the home would sale for with a traditional agent. But you should look at all your options. Have an experienced local agent look at your situation. In some areas/neighborhood, homes sell before the ink is dry on the listing agreement, so going iBuyer would not be of any benefit to you.
Seller Listing Services
iBuyers charge sellers a “convenience fee”, tend to ask for generous repair credits after the home inspection and escalated escrow fees just to name a few.
Due to the costs and risks of holding and reselling the home, iBuyers make “conservative” offers.
An analysis used a sample of 6,000 transactions that took place across four markets, Phoenix, Atlanta, Charlotte & Las Vegas – From January 2012 to February 2019. According to the study, iBuyers buy homes at a discount of 4.5% to 6.9%
I do believe that, while iBuyers are still in it’s infancy, the business model in some form or another is here to stay as long as there are investors with flush cash-flow to throw at them.
Side note: Is there more potential for fraud with Ibuyers……time will tell on this one.
Depending on your needs when selling your home, iBuyers can be a quick out. But you will pay a price for that. It’s best to look at all your options and learn the best way to move forward that meets your current and future needs.
Want all the benefits of the Ibuyer programs without the fees, hidden fees or coldness of technology. Want fast results and personal customer service? Then check out out program. Laura Lake Real Estate will buy your home to….and not at the high 8-16% cost factor either