Working with one of these new iBuyer tech/online options instead of working with a real estate agent is going to NET less proceeds from the sale. Sounds like I should never work with an iBuyer, right?
That was easy. End of blog! Or is it…
As mentioned in one of our recent YouTube videos, I think selling through an iBuyer is not good for most, but could be good for some. Here is why:
iBuyer: THE GOOD
One of the best things about selling your home through an iBuyer (Open Door, 72 Sold, Knock, and the like) is the convenience. You don’t have to worry about showing your home or getting things repaired. In most cases they buy your home from you as is and deliver the funds quickly, which is extremely convenient!
iBuyer: THE BAD
The cost for convenience–it’s pretty heavy. The key thing to remember here is the business model. These iBuyer companies are not buying your property to hold on to it. They are buying your home to turn around and sell it on the open market. Knowing this, what is the best way for them to make money? To buy from you at a lower-than-market price and then resell at the open market value.
When selling your home through an iBuyer you are not going to get top dollar. You are going to leave tens of thousands of dollars on the table. And, on top of all of that, many of these iBuyers have hidden fees involved when working. This is a major cost for the convenience.
Realtor: THE BAD
In normal markets (not a seller’s market like we are in right now) you will be required to put your home in a certain condition AND have it ready to show to other people. This takes time, money, and is inconvenient. Next to no one enjoys the process of fixing up a house with things they will never get to experience. And pretty much everyone loathes the process of making sure your home is always clean and always ready to show to strangers that could potentially buy it.
Realtor: THE GOOD
The work you put into the repairs and showings pays off! Most realtors should be able to get you a market sales price on your home, and some great realtors can get you above market value! On top of the expertise, education, and advice given to you throughout the process (you don’t have to do it alone) is the increase in NET proceeds. When all is said and done, you will get more money in your pocket when working with a realtor versus an iBuyer. And in most cases it is A LOT of money.
Who is the iBuyer good for?
An iBuyer benefits someone who needs the convenience.
Do you need to have the money from the sale quickly? Does your job or lifestyle prevent you from managing repairs or ensuring your house is ready to show? Do you have excess funds and do you highly value convenience?
Answering “yes” to any of these questions could make selling your home through an iBuyer a good option.
PRO TIP: If you do choose to sell your home through an iBuyer, make sure you still use a real estate agent. If you go through an iBuyer and do not have an agent, you do not have anyone to represent you. A hard truth about iBuyers is that they don’t care about you. They are employed by the company and are required to work to ensure the company makes money. A real estate agent is legally required to represent YOU and make sure YOU are taken care of. This is a big deal. And, good real estate agents work with iBuyers all the time, so they can still help!
If you are in the process of selling your home, there is a good chance you are also in the process of looking to buy a new home. We would love to connect and get you the best rate possible on the new home loan. Schedule an appointment below for a free consultation to hear about the rates and qualification you could achieve.