Have you thought about selling your home and considered selling directly to a company who buys homes instead of going through the selling process?
Companies who buy homes with instant offers are called iBuyers. These companies seem to have some advantages, but is selling your home to an iBuyer the right move for you? We conducted a study with Homie clients that considered using an iBuyer before ultimately deciding to list with us. Here’s what we learned:
Cons
iBuyer Con 1: Sale Price
Because iBuyers are buying your home outright, the offer price is likely quite a bit lower than what you would get through other selling methods. Buyers are usually willing to negotiate price if they love your home. iBuyers need to be able to buy and sell homes quickly, and there’s not room for back and forth on price. Of course, they also need to make a profit, so your offer may not be the full-price offer you might receive from a home buyer.
Case Study Results
Homie asked Arizona sellers who originally considered selling to an iBuyer to share the offer price that was put forth by the iBuyer. Then, once they sold their homes through Homie, we compared the final sales prices to the original offer price from the iBuyer.
iBuyer Con 2: Commissions/Fees
iBuyers still come with percentage-based fees for their services. Typically they call these service fees and they are the cost of interacting with an iBuying agent. These high fees range anywhere between 5-12% of the offer price.
On top of that, you can expect the standard closing fees that you would with a traditional selling experience. These fees vary based on your location. You could lose in the range of 6-13% of the price offered to you on your home.
Case Study Results
We asked Homie sellers in Arizona to share the fees to Homie when they sold with us vs. what they would have paid the iBuyer.
iBuyer Con 3: Additional Costs
Inspections and due diligence are still completed by iBuyers. They send a professional to your home to note all of the required repairs. In some cases, you may need to fork out the cash to make the fix before they’ll buy. In other cases they may cut a few dollar signs off your offer price in order to accommodate the cost of fixes they’ll make.
Because they need to act quickly to move inventory, these repairs can come at a high cost in order to make the purchase worthwhile to the company.
iBuyer Con 4: Sale Conditions
iBuyers will not buy all homes. Age, condition, and type of home are all things that they will consider. However, you may start the process and then find out a few steps in that they aren’t going to be able to make an offer because your home isn’t eligible to be purchased by them.
iBuyer Con 5: Local Expertise
Not all iBuyers are local. While there are some local companies who buy homes, there are big players in many populated areas. This can be a disadvantage to you as the seller. The agent you work with to receive your offer may not fully understand the nuances of your local area. This can make you feel like your home’s valuation isn’t entirely consistent with what you’re seeing in your neighborhood or city.
iBuyer Con 6: Offer Fluctuation and Expiration
The offers sent to you by home buying companies have a quick expiration date. While traditional offers will also have a date to adhere to, an experienced agent can quickly help you understand and consider the offer before you make a counteroffer.
iBuyers may not give you the original offer proposed if you’ve taken too long to consider. Another valuation of your home is completed after the initial offer expires, and you may have lost value in the meantime.
Pros
iBuyer Pro 1: Speed
One of the biggest advantages that iBuyers advertise is their speed to sale. Depending on the market, traditional selling methods can be fast or slow, but because there is a second party (the buyer) involved, things can feel unpredictable.
iBuyers will follow some of the same processes when it comes to buying your home, but there is little room for negotiation on your part as the seller. This makes the process fairly quick. If you need to move ASAP, this might be appealing to you in a pinch.
iBuyer Pro 2: Stress
As discussed above, the selling process can feel unpredictable, stressful, and confusing. Many of these feelings turn sellers off from traditional selling methods. iBuyers offer a solution that feels more streamlined. This kind of process feels less stressful because there isn’t a lot of back and forth and there’s no buyer to back out.
This comes at a price, literally. Often the homeowner is left with very little wiggle room, especially when it comes to the price. While a transaction with little negotiation can feel more streamlined, in the end it doesn’t mean it won’t be stressful in other ways.
Do You Want It All?
Homie Has It
Selling your home should be stress free, straightforward, and personal. In addition, you should be able to sell your home for top dollar as fast as possible. That’s why Homie is on a mission to change the way homes are sold. We don’t buy homes for less than they’re worth, and we’re not traditional listing agents who take high commissions.
Case Study Results
After all is said and done, we totalled the amount of money that sellers saved by choosing to sell with Homie vs. selling to an iBuyer.
Savings and Service That Make Selling Simple
We believe that selling a home needs to be simpler than the traditional process and that there is a better way than giving up a huge chunk of your equity in the name of convenience. For a low fee, you’ll get a dedicated local agent who does all the heavy lifting. Your agent will provide a comparative market analysis to help you decide on a list price, do all the paperwork, communicate with the buyer’s agents, and negotiate to get you the best deal possible. From list to close, your agent will be there every step of the way. With Homie, the hardest part of selling your home is finding moving boxes.
Sell your home, save your equity and your sanity. Start listing your home now.