One question we hear from many of our clients is “what is an iBuyer?” In this post, we shed some light on the subject to help you determine if you should work with one or not! There are many things to be aware of and we want to make sure you have all of the information you need!
iBuyers are the latest trend in the real estate world. While their services might allow you to quickly sell your house, you may end up receiving far less than had you sold in a different manner. Once you factor in all of their fees, the amount you receive will be even less. Below, we offer answers to some of the most frequently asked questions we hear from homeowners who want to sell a house fast in Floresville and are curious if they should use an iBuyer, sell directly to a professional home buyer, or put their house on the MLS with a Floresville real estate agent! Keep reading to determine which selling option will work best for you and your unwanted house in Floresville and the surrounding areas!
What Is An iBuyer?
An iBuyer is a company that purchases properties sight unseen, often for much less than retail. They extend cash offers for houses quickly, which can simplify the home-selling process. There are many major companies getting involved with iBuying, which is quickly changing how houses are bought and sold. iBuyers utilize technology to make you an offer for your house almost instantly. After all, the “i” in iBuyer stands for instant. They can simplify the home selling process which is very appealing for people who need to sell a house fast. They make an offer and close fast. Not all iBuyers are in all markets.
Who are the iBuyers?
The companies who are or have been iBuyers vary in their approach. Zillow entered the market fairly early but because of their inability to properly evaluate their purchases they left the market fairly soon in 2021. Others are OpenDoor, Offerpad, Orchard, Flyhomes, Homeward, ExpressOffers, Redfin, Homelight’s Simple Sale, and a few more that are not nationwide. Many of these including Redfin which closed in 2022 are no longer in business. Their fees range from 5% to 13% so while they might offer close to fair market value, the cost will not be a lot less or maybe more than selling with a traditional agent. The average to sell with a traditional agent is approximately 9% without any concessions. The sale time with an iBuyer will be fast with low chance that the deal won’t fall through. There is not much room to negotiate over the sales price or repair costs. While the advertising says no realtor commissions on the sale, the company has fees which vary from company to company.
They do use algorithms to arrive at the value of your home. Some will share their profits with the home seller. It is fairly common to see OpenDoor who shares the profit with the home seller to overprice the house when they put it on market. And that means the house sits on the market a long time taking price reductions.
What can you expect from an iBuyer?
However, working with an iBuyer can come with some serious drawbacks. You will likely receive less for your house, not to mention all of the costs and fees. In many cases, home sellers will miss out on thousands of dollars which usually isn’t worth it. Working with an agent or an investor will help you to save time and money on the home selling process. The best way to help figure out your best solution is to actually speak to an agent who understands the investor process like Faye Y Taylor with StepStone Realty. As an experienced Realtor® who works with investors and has done some investing as well, there are different solutions for each person based upon their individual situations. Trying to negotiate with someone who is wanting to buy your house to make a profit is not an easy task. These individuals and companies are not only experienced in the market but are experienced with the legal aspects of buying / selling. They know the contracts and how to best protect their interests and profits. That is why when the Coronavirus hit the USA they not only stopped making offers, they withdrew from some of the offers that were in process. These companies actually cancelled deals during the panademic.
How Are Their Offers Determined?
Typically, when working with an iBuyer offers made are pretty general. Of course some property attributes will be calculated into the offer, but otherwise, the offer is often based on geography and the size of your house. Agents and property buyers use what is called a comparative market analysis which incorporates the data of recently sold homes in your area to determine what your house is currently worth. iBuyers use what is called an automated valuation model, or AVM, which is similar to a CMA, but it uses technology to evaluate the property as opposed to a real live person running the numbers. This process does not consider the condition of the house, the upgrades or lack of upgrades, etc. A lot can be missed using this process and home sellers aren’t typically able to negotiate with iBuyers. In many cases, the iBuyers offer is simply take it or leave it.
Does Their Process Work?
The process is pretty simple, but keep in mind that you get what you pay for. First, you submit the details of your property. The computer will run a few numbers, quickly spitting out an offer for you. It can be difficult for a computer to accurately calculate all of the attributes of your home, leaving you with a standard generic price that will be used for many properties in your area. The process can work for some home sellers in Floresville, however, working with an agent or a professional investor/ buyer will likely get you more cash for your house.
What Do They Charge?
The costs of working with an iBuyer can be pretty hefty! According to Marketwatch, an iBuyer will charge up to 11.5% in commissions and fees. That is just about double what an average agent will charge you in commissions, plus your offer will typically be much lower than what you would be able to get on the MLS. If you need to sell your house fast, for a great price, without any cost whatsoever, Faye Y Taylor with StepStone Realty can discuss other options with you such as putting you in contact with an investor who can buy your house outright. Typically investors pay a lot of the costs because they also are offering less than market value. That is how they make their money also. Buy at a discount, fix up and resell or rent.
How Is Faye Y Taylor with StepStone Realty So Different?
At Faye Y Taylor with StepStone Realty, we work with local Floresville home sellers, helping them to reach all of their selling goals. We know investors who purchase houses directly for fair and honest prices and you won’t have to worry about expensive fees or hidden charges. Our process is fast, simple, and will help you with any unwanted property in the Floresville area. Don’t agree to sell to an iBuyer in Floresville until you learn more about the services we can offer you!
What is an iBuyer and is it right for you? If you need to sell your house in Floresville, we can help you find out! Reach out to us today for more information! (210) 216-7722
Floresville Real Estate Agent – Faye Y Taylor is here for help and to answer any questions you might have
Faye Y Taylor, Floresville TX Realtor®
Serving all of Wilson County and the South Texas area