Explaining iBuyers and the pros and cons of working with them.
What’s an iBuyer? You might’ve heard this term thrown around, but what does it actually mean? In short, an iBuyer is an institutional buyer. It’s usually an investor looking to buy your home at a discounted price and either flip it or rent it out for a time. There are lots of different iBuyers out there: Offerpad, Opendoor, and even Zillow was an iBuyer for a while.
How does selling to an iBuyer work? We went through this process with a seller recently, so it’s fresh in our minds. We went to one of the investors we work with, and they offered the seller about $60,000 (or about 30%) less than the fair market value for his home because they have to make money. They have overhead and holding costs, and they still need to turn a profit because they’re a business.
In many cases, you might leave money on the table if you work with an iBuyer. They make it sound so enticing in their ads; you get to avoid the hassle of moving, and you don’t have to show your property. That’s all true, but is it worth 30% of your equity?
To put it in perspective, you may be inconvenienced for a week while you get the house ready. If you price your home correctly in this market, it should sell within a week or two, so you’d only have to deal with about a week of showings. You need to ask yourself if avoiding this inconvenience is worth 30% of your equity. We would say no, but it’s a very personal question.
iBuyers can also work out for other reasons. We had a client who sold their home with Opendoor a while ago, and frankly, Opendoor overpaid for the house, so it worked out okay. It still might’ve been better to go on the market, but the seller had a lot going on and was under a ton of stress. The easy button worked out for them.
If you’re considering selling your home, let us know. We have access to multiple iBuyers, so if you want the easy button, we can help provide it. However, it can also be easy to sell your home on the market. We have a client who’s living with their parents over the weekend while we show their home. That’s easy for them, but they’ll also get the highest price possible.
At the end of the day, you have us to make the process easier. If you’re thinking about moving, call or email us, and we’ll walk you through all your options, including selling to iBuyers. We’d love to hear from you.
