An iBuyer is a real estate investor or group who purchases your home for cash using automated valuation models. Different iBuyers use different formulas and criteria to determine the offer they will make on your home if it meets their buying criteria. These calculations take into consideration aspects of the house such as the condition, age, features, square footage, zip code and local market conditions. Each of the items are weighted according to a proprietary formula in order to accurately and quickly provide a fair offer.
Some iBuyer companies are: Express Offers; OpenDoor; Knock; Offerpad; Zillow Instant Offers; and Redfin Now.
Common reasons for selling quickly for cash may include:
- You are in a contract to purchase another house but it is contingent on selling your current house; or perhaps NOT contingent on selling your current house.
- You need to relocate unexpectedly for a job change.
- You and your spouse are divorcing and need to settle finances.
- You inherited property you don’t intend to live in.
- You are selling rental property.
- You don’t want to go through the longer process of decluttering, doing repairs, hosting Open Houses, etc.
How Does the Process Work?
iBuyer companies are not equal. However, most of them will present you with an offer that is below what you might expect to get using a traditional broker. Plus, their fees are higher than most realtors’ commissions, 7.7% -11% vs. 6%.
In some cases, the offer to purchase may be reasonable, but after the home inspection, the investor wants a substantial deduction to make repairs.
To get started, you submit a request for an offer, answer basic questions and take some photos of your house to upload with your application. You are given an offer within a few days and have up to 5 days to consider it. If you accept the offer, a home evaluation will occur with a home inspector and a company representative. Depending upon the findings of the home evaluation, the offer price will be adjusted. You can negotiate a final price and then set your own closing date. No money is required until closing by a title company.
Determining whether you should sell to an iBuyer vs listing your home with an agent is a function of your individual needs. Consider how much you value your net proceeds, the timeline of the sale, and the certainty and convenience of the experience itself.
Is an iBuyer company right for you?
If you don’t have the luxury to wait for the perfect buyer to come along, it might be worth taking a bit of a cut on the sale price in order to speed through the selling process. Most iBuyers claim they can close the deal in as little as a week, leaving you with cash in hand to invest in your next adventure. A sale on the traditional market takes an average of at least 65 days, involves many showings, open houses, listing photos, and likely dealing with an agent. On the plus side, you are likely to get the maximum amount for your home sale possible by choosing the traditional route.
An iBuyer requires nothing more than an inspection, and will handle all the paperwork for you, making the process as easy and streamlined as possible. Also, an iBuyer’s offer is a sure thing if your property meets their buying criteria.
Alternatively, discounted brokers discount their services by offering either reduced commissions, a flat-fee MLS listing, or commission rebates. The selling process itself will remain similar to what you would expect on the traditional market except you will likely need to do a bit more of the legwork yourself.
iBuyer companies are currently in limited regions, but with their gaining popularity, expect more companies to grow in your area soon. But those who live in markets with multiple operating iBuyer companies’ have an advantage by being able to shop around for multiple quotes.
Selling a home is likely one of the largest transactions you will make in your lifetime, and it should be approached carefully, assuring you have all the facts before jumping on any offer given.
Express Offers is currently being offered through eXp Realty in 13 states–
Wisconsin is coming soon.
With Express Offers, eXp Realty isn’t buying the houses, unlike leading iBuyer companies Zillow, Offerpad, Opendoor and Redfin. Instead, through the platform, agents solicit multiple offers from investors and present them to their clients. It still offers homesellers the certainty of an all-cash, quick-close offer, without having the be the entity that buys homes.
Contact Premiere Stagers & Realty for more information. 608-345-9396