Published on August 5, 2023 | 3 Minute read
If you’re considering selling your home, you’ve probably heard the term “iBuyer” being used in the real estate industry. This term is short for “instant buyer” or “internet buyer.” These iBuyers are companies that use data and technology to make cash offers on homes. They provide sellers with quick transactions, making them an attractive option when selling a home.
It’s important to note that the convenience of selling a property to an iBuyer comes with a cost, as they make lower offers than traditional buyers. However, if you want to make a quick sale and avoid the possible hassles of listing a home and encountering issues like the buyer’s financing falling through, you may find value in working with an iBuyer.
Selling to an iBuyer has its advantages and disadvantages. Let’s take a look at them:
Cash Offer - The most attractive characteristic of iBuyers is that they buy your home for cash, bypassing the traditional listing process. Instead of waiting for an interested buyer to make an offer, negotiate, and wait for the buyer’s financing, the iBuyer experience is quick, efficient, and convenient. It gives sellers peace of mind since they provide a more certain transaction.
Minimal Preparation - You can avoid having to stage your home, schedule showings, and enhance its appeal if you work with an iBuyer.
Valuation - iBuyers assess the value of a home by using automated valuation models, which combine existing data and mathematical modeling to determine the value of your property. Data points AVMs analyze may include property details, market conditions, recent sales, and location.
Quick Sale - iBuyers aim to make sellers happy by making an offer on their home quickly. Once the seller accepts the offer, the closing process can take as little as just a couple of days.
No Real Estate Commissions - Since a real estate agent is not part of the process, you negotiate on your behalf, saving you money by not having to pay a commission to a real estate agent.
Lower Price - Working with an iBuyer typically means selling for less than you could receive on a traditional transaction. They factor in service fees and needed repairs, which will have an impact on the offer price. These fees can range from 5-10%.
Limited Market - Some iBuyers look for specific property types and might only work in certain areas. If your home is not located in their market or doesn’t meet their property requirements, an iBuyer may not be an option for you. For example, some iBuyers only buy single-family homes.
Non-Negotiable Offer - If your primary objective is to maximize your property’s sale price, working with an iBuyer might not be suitable for you, as they usually present sellers with firm offers.
Missed Opportunities - Working with an iBuyer means not having your property marketed, limiting the possibility of receiving multiple offers, and possibly reducing your profit.
Like selling traditionally, selling to an iBuyer has pros and cons. It’s essential to consider your goals and ideal timeframe when deciding whether or not working with an iBuyer is right for you. It’s recommended to take some time to do research and look into current market conditions before making a decision.