iWatch, iPad, and now iBuyer? Technology is infiltrating every aspect of our lives to make it easier, and real estate is no exception. However, should you trust the services of an online company like Opendoor or Knock over the traditional real estate route?
On paper, the promises made by the growing number of iBuyers (instant buyers) certainly look attractive. They offer a quick turnaround with an offer within 24 to 48 hours, a guaranteed sale, and quick closing. Some also offer a streamlined process for those purchasing another property at the same time.
For those who want to sell their house without a real estate agent, it seems like a no-brainer. But what is the price to pay for the convenience and speed offered by an iBuyer?
The offer is often well below market value
iBuyers like OpenDoor, Offerpad, Zillow Offers, or Redfin Now make their money thanks to the scale of their operation. However, they also profit by purchasing properties below what they would have brought on the open market.
Their offer is calculated based on algorithms, such as the price of comparable houses that sold in your area recently rather than in-depth knowledge of your local market. You may be able to sell your home a lot quicker through an iBuyer that through a real estate agent. However, you may also leave behind a significant amount of profit.
Be prepared for multiple fees
Besides lower offers, iBuyers also include a built-in fee in their proposal that could further affect your benefits. A real estate agent’s fee will typically account for 5 to 6% of the sale price of the house. On the other hand, an iBuyer’s service fee is usually higher: up to 12% depending on the house and the company you are considering selling your home to.
An iBuyer may not be the right choice for a house in poor condition
After you accept an offer from an iBuyer, the company will send a representative to inspect the property. Typically, iBuyers prefer homes in livable condition or which need minimal repairs to put them back on the market as quickly as possible.
Depending on the extent of the repairs they judge necessary, the iBuyer may significantly reduce its offer or back out completely.
iBuyers might not be an option in your area
The number of iBuyers is growing rapidly. Some of the major actors in the real estate industry, such as Keller Williams or Zillow, are developing their iBuying programs. However, they remain absent from many areas in the United States.
With an industry still in its infancy, it will likely be some time before iBuyers are an option for most of the sellers in the country.
Is there an alternative to iBuyers?
If you would like to sell your property fast but would rather avoid iBuyers, local companies like Rocking Porch offer an alternative solution. Not only are they familiar with your market and can provide a personalized fair offer, but they also accept properties no matter the condition and do not charge a fee.
If you would like to sell your home quickly in Cherokee and Cobb County, Georgia, including Woodstock, Marietta, Roswell, Acworth, Kennesaw, and Canton, we may be able to help. Contact us today to discuss your options.