The Cost of Convenience
What is an iBuyer?
An iBuyer, or Instant Buyer, is an investor or an investment company that uses technology to make an offer on a home instantly. They pay cash for the home and close quickly. The iBuyer program has gained a lot of momentum lately. They offer a simpler and more convenient alternative to the traditional home sale.
Who are the iBuyers?
The iBuyer market has gotten crowded recently - that only happens when the idea is successful. You may recognize some of the more prominent players: Opendoor, OfferPad, Zillow, Perch, etc. These companies purchase homes directly from the seller, make repairs and necessary updates, and then turn around and sell the houses for a profit.
iBuyers only work in a few select markets. Markets must be active for them to be successful. They also put restrictive parameters on the homes that they will buy. These restrictions are on the size and age of the house. They also enforce a price-limiting window; like nothing over $400,000 in DFW.
How does the iBuying Process Work?
The process is relatively simple. A homeowner requests an offer from the iBuyer. The iBuyer estimates the value of the home and makes an "instant" offer. If the homeowner accepts the offer, the iBuyer has the home inspected and comes back to the seller with further demand for money to cover repairs. If the seller accepts everything, the closing is scheduled and completed in the desired timeframe.
Sellers find that these iBuyer programs offer prices are lower than traditional home sales and that the fees and expenses are higher. This is the price the seller pays for the convenience. The iBuyer is in business to make money. They will make a profit on the home.
Why would someone use an iBuyer?
So why would a seller choose to sell through an iBuyer program? Often homeowners are unable to make a house ready for market. They struggle with an elderly parent or sick family member that makes leaving home for a showing impossible. Some cannot handle the stress of having their house "show ready" or need to sell quickly to settle an estate. Whatever the reason, these are people willing to leave a lot of money on the table in trade for the convenience.
Want to know more?
How can I help? Glad you asked. Keller Williams has partnered with Offer Pad to help our clients decide. Our program, called Keller Offers, is available in our market. As a certified Keller Offers agent, I can bring you an offer before you decide to list your home. We can compare this offer against other iBuyer programs as well as the traditional sale of your house. Armed with all the data you need, you can make an informed and qualified decision on the best way to get your home sold.
How do the iBuyer offers stack up??
Here is a real-world example.