Pros & Cons of Selling your Home to an Instant Offer Company
Instant offer companies are known as instant buyers or "iBuyers" because they give sellers an almost instantaneous offer on their homes. Some well-known iBuyers include Opendoor, Offerpad, Redfin, and Zillow Offers. iBuyers typically purchase moderately-priced homes, fix them up as needed, and then re-list them.
While iBuyers often give sellers an offer within a couple of days and closing dates within 2 weeks, the major downside to selling to an iBuyer is that you will not get top dollar. They are looking for homes where they can make a specific profit margin so the company will analyze your home online, using algorithms to come up with a value. Sellers should expect an offer of about 10% under fair market value. iBuyers accept only a tiny percentage of the homes submitted.
If you work with an iBuyer, make sure to read all the terms, as you may be required to cover some repairs. The company may send out a home inspector to determine what costs they will incur while preparing to resell the house. While you may not have to pay the 4-6% real estate commission, iBuyers charge fees that may run anywhere from 6-9%. The total costs of using an iBuyer can sometimes run as much as 12-15% of your selling price.
iBuyer benefits sellers who don’t have the time or desire to market their home traditionally. If you are in a situation where you need to sell your home quickly and are willing to take less than your home is worth, then an iBuyer may work out well for you. Before you offer your home to an iBuyer, please contact me to discuss your options.
