For years, when you wanted to sell your home, you would go to a realtor and they would help you get the highest offer possible on your home. However, with the advent of the internet, a new trend is taking the real estate world by storm. These new real estate companies like Opendoor and Knock, known as iBuyers, allow you to sell your home instantly. They promise no agent commissions and the ability to sell your home at any time no matter its condition. This may sound like the perfect deal, but are iBuyers really all that they’re made out to be? These are the pros and cons of using an iBuyer to sell your home.
Pro: Speed and Convenience
Because of the fact that iBuyers are not traditional buyers, you can sell to them at any time. All you have to do is send in some pictures of your home and fill out a questionnaire about its basic features. They will then use algorithms to give you an estimate on your home within 1-2 days. This offer will not be as high as you could get by selling with an agent (which we will discuss later), but you get the added benefit of not having to wait for offers and stress about choosing the right one. Using this process, one could sell their home in under a week.
The fact that it is a company buying, and not one person or a family, means that they will accept your home at any time. You can pick a closing date that is convenient for you. This can make it easier for people trying to buy and sell at the same time, or people who just need more time to move out.
While this may seem like an appealing option, let’s take a look at what this easy route will cost a lot. You will pay dearly for the convenience.
When you sell with an iBuyer, they buy your home at its current condition. This is fine if you don’t want to make repairs, but it means that they have to. What isn’t advertised by these companies is the fact that after their initial (often already below market value) offer comes in, they will still send out a home inspector. This inspector will most likely point out even more repairs that need to be done, further lowering the amount of money you make when you sell.
Con: High Fees
iBuyers claim that they have no Realtor fees. While this may be technically true, there are other fees they don’t tell you about. A traditional real estate agent’s commission is around 5-6%, while OpenDoor charges a ‘Service Fee’ of 6-12%. This massive fee is on top of the money you are already losing because of your home’s current condition and needed repairs. In fact, based on consumer experiences, the repairs are where the fees really add up.
Con: Poor Reviews
These companies aren’t just concealing these fees either. Reviews of iBuyer companies online show that they can be not only sneaky but outright fraudulent. Ludicrous repair estimates for non-issues and trying to lower the price after closing documents have already been signed are just some of the complaints users have. If you decide to use an iBuyer, DO YOUR DUE DILIGENCE.
Is It Worth The Risk?
All in all, MarketWatch estimated that people who sell to an iBuyer make 11% less money than people who took the route of a traditional realtor. Eleven percent may not sound like much, but depending on how much your home is worth, it can mean the loss of $10,000-$100,000. Now ask yourself: Is selling your home a few weeks earlier really worth losing that much money?
While they may be good in specific situations, iBuyers are not the new way to sell your home. They still have a long way to go in terms of pricing and fees. At this point in time, for most people, the risks and costs definitely outweigh the benefits.
How To Sell Your Home Faster For More Money
If iBuyers aren’t a good option in most cases, then how will your home sell? Start by hiring a great real estate agent with a solid track record for selling homes in your community. Talk with your agent about basic updates to determine what will give you the most bang for your buck. Popular updates that are likely to help your home sell fast for more money include fresh paint, new flooring, and updated kitchens and baths.
A big part of preparing a home to sell quickly is deep cleaning and decluttering. Starting with a decluttered and super clean home will also help to make preparing for showings easier.
Finally, price the home right to start with. Nothing stalls a home sale quite like being overpriced. In fact, pricing a home at or below market value is a strategy that can help create an “auction effect.” This causes buyers to bid up the home and may end up selling for higher than you originally thought.
If you’re thinking about listing a home for sale in the Raleigh area, contact me at 919-887-5117 to find out how I sell homes quickly for top dollar.