Many of us appreciate the speed and convenience, from fast takeout to on-demand streaming. The same can be said for many home sellers today, who are looking to move quickly and without having to list a home the traditional way.
Enter iBuyers, which can provide a seller with an instant cash housing deal and a faster, smoother transaction, all without setting foot in property.
If you are in the market for sell your house, here’s how to land an instant housing deal, taking into account the pros and cons.
What is an iBuyer Instant Housing Offer?
An instant home offer, known as iBuy (the “i” stands for “instant”), is a cash offer from a business to buy your home quickly, often done overnight. These iBuyers use proprietary algorithms and property data to formulate an offer price, but lower than the price you would get in the market. This is because iBuyers need to consider not only their operations but also the costs of any necessary repairs to your home and then owning or reselling the property.
“We’ve always had cash buyers and loan sharks willing to close deals and close quickly at a discounted price for a profit,” says Bruce Ailion, Atlanta-based lawyer and associate broker and real estate agent at RE / MAX Town & Country. “The difference here is that iBuyers are usually created online and aimed at buyers who prefer convenience, but their goal remains the same: buy below market value and sell at a profit. “
The best candidates to sell to an iBuyer are sellers who are under time pressure or financial pressure to unload their home quickly.
“An instant housing deal is particularly appealing to sellers who have to relocate due to relocation, are struggling with illness, experiencing financial hardship, have a superior type property that they cannot afford to fix, or have need funds and a quick sale to buy their next home, ”says Ailion.
Beyond a quick close, instant housing deals can be appealing for a number of reasons, including the fact that there is no need for tours or open houses.
“This is a pandemic-friendly option for selling your home without ever having to put it on the market,” said Brandon Brittingham, CEO of the Maryland & Delaware Group of Long & Foster Real Estate in Salisbury, Maryland.
However, iBuyers aren’t available in all housing markets – the business just doesn’t work (yet) in some areas. The iBuyers with the largest footprints include:
How to get an instant housing deal
Unlike the traditional process of listing your home and waiting for potential buyers to come to you, getting an instant home offer involves asking for one directly from an iBuyer. Here’s how.
1. Take the tour
Find out if that iBuyer you are considering is trustworthy by looking at customer reviews and its Better Business Bureau rating. Once you’ve narrowed down your list, you can request offers from each iBuyer and compare their offers and associated service charges. Unlike applying for a mortgage, asking for an offer shouldn’t cost you any money.
2. Request an instant housing offer
You will be prompted to enter information about your home through the iBuyer website or app, but be prepared to answer any additional questions the business may also have, such as the age of your roof, when it was last replacement of your furnace or information regarding a recent renovation.
3. Receive and review your instant housing offer
You can expect to receive your instant housing offer in as little as 24 hours after submitting your application, but sometimes it can take longer. Note that you cannot negotiate the price, so if you are not happy with what is on offer, you can try another iBuyer, or you may need to consider selling your home in another way.
If you like the offer, be sure to review it carefully so that you understand it and the fees you will need to pay. A real estate lawyer can be a valuable resource when reviewing the offer.
Also be aware that you might not receive an offer at all. This could be because the iBuyer isn’t buying in your area, or your home doesn’t meet certain parameters to generate an offer.
“If that happens, you can always ask for an instant offer from another iBuyer, find a private investor or home pinball machine who can give you a very discounted price to buy your home, or choose to list and sell your home. in a traditional way, ”says Ailion.
4. Prepare for a home inspection
If you receive an offer and decide to accept it, the Buyer will order a home inspection to determine if your home has major problems and what repairs might be needed. You may have the option of performing these repairs yourself or subtracting the estimated repair expenses from the final selling price.
5. Choose a closing date
Once the inspection is complete and the offer is finalized, you will have the opportunity to choose a closing date it is convenient for you (for example, when you plan to move). Some iBuyers let you close in just seven days, and many are flexible up to 90 days.
Advantages and disadvantages of the instant home offer
There are many advantages to accepting an instant housing offer, but also a few disadvantages which can considerably outweigh the advantages.
- Accelerated closing (and you can choose your closing date)
- Little or no risk of trade failure
- No need to prepare the property for sale (e.g. make repairs or improvements)
- No open days or in-person screenings
- No Evaluation requirement
- No commission paid to a real estate agent, which can cost 5-6% of the purchase price
- Possibility of a lower offer than you would get by traditionally selling
- Fees ranging from 5% to 10% of the offer price
While you don’t have to worry about listing, marketing, and presenting your home (or paying a real estate agent to do it for you), you’ll likely leave money on the table with a instant home offer.
“I requested an instant real estate offer on my house and was offered up to $ 150,000 less than its market value,” according to Charles Bezak, real estate agent at Realty One Group in Las Vegas.
However, there are other aspects of iBuying that could make a lower deal worth it. For example, you don’t have to worry about the deal failing, which can happen in a normal trade if a buyer can’t get financing or pulls out. You will also avoid the need for potential buyers to visit your home – a concern now in the pandemic and an inconvenience under regular circumstances.
“You are generally not required to have a formal appraisal with an iBuying company,” adds Brittingham. “This is a big deal because reviews can add weeks to the process and affect the final price.”
On the other hand, you will have to pay the iBuyer a service charge of between 5-10% of the offer price, in addition to paying less money for your home.
However, iBuying isn’t all about all extremely low offers, and if the need is there, a seller could benefit, Brittingham notes.
“IBuying is taking off today because the gap between supply and market value is narrowing,” says Brittingham. “The [sellers] we see it doing it out of convenience or to get into their next home quickly, not out of desperation.
Should You Get an Instant Home Offer?
Depending on your situation, selling your home to an iBuyer may be worth it if you are forced to sell and move quickly, and are willing to accept less money than you would likely get on the open market.
The reality, however, is that sellers today have the advantage due to high demand and low inventory, so you should try to take advantage and work with a real estate agent to get the most money for your business. House.
“With the market as hot as it is in most areas, a traditional sale is worth it,” said Ailion. “But in some circumstances a home is particularly disadvantaged or difficult to value, in which case selling to an iBuyer may be preferred.”