What’s it like to work with an iBuyer?

Helping a family find their first home is always such a joy. But when an iBuyer is on the other side of the transaction, does that change the process at all? As I found out in my recent first transaction with an iBuyer, the answer is yes!

I was helping the sweetest family, referred to me by a dear friend and vendor. We were on the hunt for their first home for them, their two little girls, and their dog. All the usual suspects came into play – they had definite ideas about style of house, schools, and a desire for parks and shopping nearby. After a few neighborhood tours, we honed in on a couple of westside neighborhoods that really called to them.

Inventory was quite low, so we initially didn’t find much to look at. After a couple of weekends of homes that didn’t hit the mark, they were wondering if they needed to rethink their “must have” list. And wouldn’t you know it, the very next day a house that checked every box came on the market.

It was listed by an iBuyer that had recently entered the Portland market, so I wasn’t sure what to expect. Getting their offer submitted was perfunctory and lacking in human interaction, everything was through a web portal. Neither the listing agent, nor anyone in customer service, seemed to know anything about the home. Not too surprising, as they were all located out of state and had never actually been to the house. The same held true for the inspection negotiations. The listing agent was not available to discuss the details, so we basically asked for everything, and flexed just a little. It all felt like we either fit their algorithm or not. Like the offer and the repair requests were entered into their system, and the computer decided whether or not to agree.

All in all, the process felt quite mechanical. I worked extra hard to keep my clients informed and engaged, and provided more reassurance than usual, to make up for the lack of communication from the other side. There was nothing overtly negative about the transaction, but there was so much missing. Human insight, market expertise, engagement, and support are all vital to a successful and positive real estate transaction. The homeowners who sold to this iBuyer were deprived of all of these elements, in addition to selling their house under market value. So, if nothing else, my first iBuyer transaction highlighted what great REALTORS® do best. We build relationships, foster trust, facilitate smooth transactions, negotiate fiercely on behalf of our clients, and help our clients achieve their highest goals, all while providing that all important human touch.

Portland iBuyers: What Home Sellers Need to Know About Instant Offers

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.