Recently a new type of buyer has entered the real estate market. We have always had investors, who are often cash buyers, but the new guys on the scene are the iBuyers. These iBuyers are companies that operate predominantly online in certain markets offering to purchase your home at a “competitive” purchase price, allowing you to choose your closing date, and guaranteeing that your home will close. Their main strategy is touting that they are “hassle free” and “remove any uncertainty.” However, there are some things that they don’t tell you.
“Competitive Purchase Offer”
When these companies offer to purchase your home at a fair market price there is no guarantee that they are. Keep in mind that when you work with a Realtor and they prepare a home valuation for you, they have a vested interest in your home’s value. Since most Realtors work for a commission they have every incentive to sell your home for the highest price, and as quickly as possible. Not only is their reputation on the line, but also their paycheck. If you consider on the other hand that when an iBuyer gives you a home valuation with an offer to purchase, it is in their best interest to suppress the value of your home as much as possible. The more they pay for your home the more they cut into their profits. In my experience and those in my office, the price offered by iBuyers is considerably less than what we would consider a fair market value.
“Pick your closing date”
This is probably the only part of the iBuying experience that actually holds up, but they still don’t tell you everything. When you choose to list your home with a Realtor (namely me) we can’t guarantee a specific closing date, but we can help you negotiate for the closing date you want. The seller can often dictate the closing date assuming they are willing to be flexible in other areas, especially in today’s market. I understand that in very few circumstances closing on a specific day is more important than the bottom line. If the closing date is more important than anything else chances are a Realtor can help you sell your home and make the closing date. Don’t let the fear of the closing date keep you from getting the most for your home.
As the old saying goes, “The only things in life that are certain are death and taxes” - this couldn’t be more true. When you get the ASIS purchase contract for your home from an iBuyer, there is an inspection period built into the contract. These inspection periods can be for 15 days or longer. This means if they find anything they deem unacceptable they have the right to ask you for a lower purchase price or have you hire a contractor to make the repairs. If you decide you don’t want to lower the already low price or make the repairs they walk away from the deal. There is no way around this issue. Our job as Realtors is to help you weed out offers from buyers who are likely to be unable to see the contract through closing, and to write up contracts that leave as few outs as legally possible.
Don't Leave Money on the Closing Table
I understand why the idea of using an iBuyer to purchase your home may look like a great idea, but when you crunch the numbers and look at all the details you find a different story. First the “offer” is generally well below what the market suggests, and if you were thinking “well at least I’ll save the commission,” think again. Not only do some of these iBuyers charge anywhere from 6-13% commission, but they also tack on additional fees and surcharges. Sure they will offer free moving services, but is it really “free” if you are paying a non-negotiable fee that includes the “free” move? As for the hassle of selling your home, that is why you want to use a competent Realtor. When you choose to list your home with me it becomes my job to remove as much of the hassle as possible. Isn’t it worth it to keep more money in your pocket? A Realtor will help you mitigate as many inconveniences as possible. Don’t let these big companies prey on your fear of selling and keep you from receiving the largest return on your investment as possible. Keep in mind they are in the business to make money, the only way they can do this is by shortchanging you!
If you are considering selling your home click the contact button and let me know! My job is to sell your home for the best price and as quickly as possible.