Should you ever sell your home to an iBuyer? Today I’ll give you some key points to consider.
There’s a new player in the real estate game today: the iBuyer, or ‘instant buyers.’ They’re also known as ‘institutional flippers.’ Have you ever driven down a street and seen a sign that says “We Buy Ugly Houses” or “We’ll Buy Your House for Cash in Seven Days”? Those signs come from mom-and-pop flippers, but other recognizable brands like Zillow Offers, Offerpad, and Open Door—all these companies can also be considered iBuyer's. Here’s how they work:
A home seller visits one of the iBuyers’ websites and fills out the information about their house. The company they chose will send them an instant offer within a day or two, which the seller can accept or reject. An iBuyer’s offer comes with the promise that selling to them is a simpler, easier way to sell your home as compared to a more traditional approach. Essentially, they’re selling a speedier, more convenient way to list a home; all the seller has to do is accept the offer and then the iBuyer will take care of preparing the home for sale, marketing, and so on.
An estimated 40% of homebuyers in Phoenix have received offers from iBuyers before they even considered putting their homes on the market. That begs the question, “Should you sell your home to an iBuyer?”
My answer to that question is that it depends. Do you need to sell your home very quickly? If so, selling to them may be worth considering. However, it would be short-sighted for you not to consider the downfalls of selling to an iBuyer.
One of the downfalls associated with iBuyers is that they’ll offer you a lot less for your home than it’s worth on the open market. Not only that, but they’ll also charge a service fee and they may even have a list of repairs tied to that offer. If you choose not to make those repairs, they’ll lower their offer.
It’s hard to know exactly how much sellers stand to lose when they choose to sell to an iBuyer over going the traditional route, but according to the financial website Market Watch, the average loss for sellers is around 11%; in some markets, it’s as high as 20%.
In the end, iBuyers aren’t going anywhere. They’ll continue to be a segment of the marketplace as much as the traditional path of selling your home with a real estate agent. So if you’re considering selling to an iBuyer, it’s wise to do your homework. Unsurprisingly, nine out of 10 home sellers reject iBuyer offers.
If you’re thinking of selling your home, we can provide you with an idea of what it’s worth on the market and how long it would take to sell. All you have to do is reach out to us! We’ll also address any questions you have about the virtues of selling your home traditionally versus selling to an iBuyer. We’d be happy to help.