iBuyers are popping up all over, but are they worth the hype? Here’s a complete guide to iBuyers so you can determine what is the best solution for you.
Contents
What is an iBuyer?
iBuyers are companies that purchase homes for cash (no financing needed).
This can be done directly with an iBuyer company or with the assistance of a real estate agent (recommended to guarantee the most bang for your buck).
They will make an offer on your home based on an estimated value done based on similar home sales in the area – and may not even see your home directly before making their offer.
iBuyer vs Real Estate Agent
The biggest differences you are looking at with an iBuyer vs. Real Estate Agents are:
| Real Estate Agent | iBuyer | |
|---|---|---|
| Commission % | Yes (up to 6%) | Yes (up to 11.2%) |
| Guaranteed Price | No | Yes |
| Multiple Offers | Yes | No |
| Potential for Higher Offer (more money in pocket) | Yes | No |
| Guaranteed Sales Timeline | No | Yes |
| Expert Advise | Yes | No |
| Closing Costs Negotiable | Yes | No |
| Repairs Negotiable | Yes | No |
There is no right or wrong answer on which to choose. It all depends on your specific needs.
If you have some time to spare, it’s recommended to connect with a real estate expert first to determine your home’s true value and what your options look like to see what may be the best fit.
Keep in mind that if you qualify for an iBuyer program, you can always market your home first to the open market to see what comes in, then go for an iBuyer offer later on if that turns out to be the best option at the time.
Purchase Price: With or Without iBuyer
Below is a graphic that showcases the median purchase price of a home with or without an iBuyer using Arizona as an example.
Here’s another example provided by MarketWatch data:
The biggest decision most sellers will need to make is to decide on whether the convenience of the iBuyer process is worth the potential decrease in amount they will take home at the end of the day.
iBuyer Pros and Cons
Pros
One of the most common reasons people use iBuyers is because it can be a convenient solution for many. This is due to the fact that most iBuyer companies will make an offer without even seeing the home – so no hassle of staging, open houses, etc.
The speed of the process when using an iBuyer is another reason many sellers choose to use iBuyers when selling their house. It’s not guaranteed to be faster, but it is a common reason many choose to go with iBuyers.
Cons
While a common benefit many sellers see is that they do not need to pay commission to a real estate agent when using a buyer, what is not made clear is that there may be a significant cut in the offer that is made vs. what the home could really sell for. The % in commission may not offer as big of a savings vs. the money that was lost in what the home could truly be sold for.
You lose out on the opportunity of having multiple offers which could result in an even higher sale price than asking for your home.
It’s common that sellers will receive a hefty repair list from the iBuyer company. If repairs cannot be made, credit may be removed from the initial offer price in lieu of the repairs.
Closing costs cannot be negotiated (including escrow fees, title fees, HOA transfer fees, etc.).
There are additional fees that are included in an iBuyer transaction that are not included in a standard transaction with a real estate agent (7.5 – 11.2%), whereas a real estate commission is set to be no more than 6%.
After the home goes into escrow, the seller is on their own. With a standard transaction, your agent is with you through the entire process start to finish.
While an iBuyer may be a fantastic solution for many, it’s always best to work with a real estate agent to make sure that you are getting the best offer for your home.
iBuyer Selling Process
- Connect with an iBuyer and submit information regarding your house.
- You’ll hear back from them regarding whether they would like to potentially make an offer on your home or not. You may be required to submit additional information before they make an offer.
- They will analyze the information provided to put together an offer amount and get back to you within a couple days.
- Once received, you can choose to accept or decline the offer. Should you accept, you will be required to submit an agreement for the offer.
- A representative from the company will come inspect the home.
- If all is good, you will be able set a date to close, complete some final paperwork, and get paid!
iBuyer Companies
Keller Offers
Keller Offers provides the typical perks of convenience and speed as your standard iBuyer, but with the expertise of a trained Keller Williams real estate agent by your side.
OpenDoor
OpenDoor kicked off the whole iBuyer trend back in 2013. They buy and sell homes across the U.S.
Knock
Knock’s specialty is for sellers who are also looking to buy at the same time. It acts as a trade-in program for your house.
Offerpad
OfferPad is very similar to OpenDoor in which they buy and sell houses.
Zillow
Zillow has an instant offers program that is limited to certain areas, but plans to expand since its launch in 2018.
Redfin
Redfin is comparable to Zillow and launched around the same time – also currently working to expand.
iBuyer Calculator
iBuyers use an estimator to determine the value of your home based on comparable sales in the area.
You can get your home value estimate free in seconds to get an idea of what you might be looking at with an iBuyer.
To get a value of what your home could sell for on the market, give us a call at (702) 838-7700 or email info@lasvegashomessold.com to set up a free appointment.
iBuyer Service Fee
iBuyers have service fees that range up to 11.2% and typically start at around 6%. This is in lieu of the commission that you would normally pay a real estate agent which is set to a maximum of 6%.
Can You Negotiate with iBuyers?
Many iBuyer companies do not negotiate, but with some you may request a second offer with evidence as to why you feel like your home is worth more than what was offered.
Your Las Vegas Real Estate Experts
If you’re looking to utilize iBuyers and have questions, or simply want to move forward with the sale or purchase of a home, contact us today at (702) 838-7700 or info@lasvegashomessold.com
