Dear Claire: What is an iBuyer?
The iBuyer Option: Convenience vs. Profit in Home Selling
There are plenty of websites online that will buy your home without you ever having to deal with the typical seller process of having strangers coming through your home.
iBuyer typically stands for ‘Institutionalized Buyer’ or ‘Internet Buyer.’ In both of these cases, there going to be big corporations; typically, somebody like Redfin or Zillow. They have a very clear and easy Internet process that you use to find out what they would be willing to pay you for your property.
So, what does that look like? You go to say, Zillow, and you fill out a form. Zillow contacts you and they send someone to look at your house. They walk through your house and look at everything. They take notes as to what needs to be done on your home. For instance, maybe there’s an electrical outlet that is broken, or maybe the furnace is at the end of its useful life. They write all of it down and then they use this to come up with the number that they’re going to offer you.
Say my house is worth $400,000 and they say it’s worth $400,000. They’re going to subtract from that $400,000 their service fee. They’re going to also subtract an amount for repairs and then a convenience fee. They’re going to name it different things, but in essence what it ends up being to you Is about an 11% decrease in cash to you at closing. Now this makes perfect sense if you’re looking for convenience; forced people are willing to pay for convenience over everything. So, the process itself takes a shorter amount of time. You can do this process online; one person comes up to look at your property, they make you an offer, and then within a couple of weeks it’s closed and done. You have your money and it’s over.
Whereas, working with a real estate agent you’ll get more money, but sometimes the process can be a little bit longer. As a Realtor®, I’m going to handle all the things that might come up. For instance, in the era of COVID, we’re providing booties and hand sanitizer, we’re pre-screening all buyers to make sure they’re healthy and that they’re pre-approved and so the only people that are walking through your property right now would be the ones that would be qualified to purchase your home.
That being said, there are times where iBuyer makes sense. For instance, you have to sell in a jiffy, you have to be somewhere, or something’s come up that has to happen quickly. It’s going to be really convenient and super quick. So that is something to consider, but you will be paying for that convenience
A couple of other things you should know are that you’re not going to have to deal with people coming through your house and that includes me. I’m going to have professional photography. I’m going to have perhaps a stager come, and obviously me. So you’ll have some people coming through your house, but the ultimate result is more money in your pocket. It just depends on what experience you’re looking for and how quickly you need to get it done.
As always, if you have any questions about this or any other topic, you can direct message me; I would be happy to answer them. Also, if you have a topic that you think other people might be interested in, please reach out. If you’ve had an iBuyer experience, please let me know. I’m curious because I’ve had a few clients and we’ve done a side-by-side comparison. We had the property listed and they said, “Hey, I just want to run it by Zillow and see what they say.” And in every instance, we were able to get them way more money for their home then they were able to just by going the iBuyer route. So again, I think it’s valuable if you’re looking for convenience or a quick close and a quick turnaround, but there’s definitely the downside of not netting as much cash. Have a wonderful day and we will talk soon.
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