You probably have heard the OpenDoor radio ads, or maybe you’ve seen Zillow’s “make me an offer” button and the resulting property sales in town. These cash offers are often referred to as “instant offers” and there’s a lot of buzz about how the real estate selling process may be changing as a result of these new players in the real estate industry. We break down the pros and cons of this new trend so you can understand what your options really are, and what makes the most sense for you when selling your home.
Exactly What is an iBuyer?
An “iBuyer” is a nickname that’s commonly used to describe an internet, or institutional real estate buyer. iBuyers are generally large national companies or pools of investors who have cash for real estate purchases and who offer quick and easy closings that you schedule at your convenience. You can close in 14 days, you can close in 90 days, or more – the choice is yours. If you choose to accept an offer from an iBuyer, generally this is the process to expect:
- They will schedule a “property evaluation,” which is very similar to a traditional buyer inspection.
- The iBuyer company may elect to adjust the sales price to reflect repairs they think will need to be made in order to sell the property on the open market, or hold the property as a rental investment.
- Any requested repairs will be completed by the iBuyer company after closing so there will be no inconvenience to you if you agree to their reduced sale price.
- You then have the choice to accept their revised offer and move on to closing, or cancel the sale.
What’s the Catch?
Sounds great, right? The iBuyer approach offers convenience, control and certainty, which – depending on market conditions – may be in short supply in a traditional real estate sale. So what’s the catch? Well, the catch is their fee structure.
According to research from real estate data firm Collateral Analytics, iBuyer options cost more in fees and result in a lower-priced sale than properties sold by traditional agents. Overall the total direct costs, ignoring repair credits, seem to run in the 13% -15% range depending on the iBuyer, versus the typical 5% to 9% combined seller and buyer costs with a traditional broker .
Of course there are many additional details to consider. Given your needs and your circumstances, paying a bit extra for the convenience of an iBuyer offer may actually save you money in the long run. Or your particular priorities may place a lower weight on your net sales price. The certainty of an upfront, known closing date and price may offer you some new options in terms of selling your existing home and buying your dream home, or even trading one property for another. These scenarios have been difficult to accomplish with a traditional “retail” sale in most real estate markets.
How We Can Help You
We are now certified iRep™ real estate agents. We are trained to solicit iBuyer offers for your property on your behalf. We then present you with a side-by-side comparison of the details of the various iBuyer offers you may receive, along with the details of a traditional real estate sale with us. Then you can decide what makes the most sense for you.
Like all buyers, iBuyers will only be interested in certain types of properties. However, our professional skills in property marketing, and our ability to see and highlight potential in most real estate properties, will absolutely yield you a higher offer from an iBuyer than if you were to do this yourself. Additionally, our training in completing an effective iBuyer analysis of your property should yield you a lower repair adjustment, which can be the difference between a successful instant cash offer and a disappointing one.
We would love to share our knowledge with you about these new developments in the Portland area real estate market. More iBuyer companies will be doing business in Portland starting in 2020, and that means more (potentially confusing!) options for sellers. Give us a call, or click here if you are contemplating a sale. We can help you make the most of your very important real estate asset by presenting ALL of the selling options available to you.
