It wasn’t long ago when homeowners could only sell or buy homes by going the traditional route. With today’s technological advancements, the rise of iBuyer companies has simplified the long buying and selling process of homes. These companies can buy or sell your home almost instantly. That’s why they are also referred to as instant buyers.
While it may sound appealing to go through an iBuyer to buy or sell your home, you must consider some things before deciding to work with one. Here’s how iBuyer companies work, how it compares with traditional real estate companies and the benefits of working with one.
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What Are iBuyer Companies?
The term iBuyer refers to real estate companies that use automated valuation models to buy and sell homes almost immediately, typically within 24 hours. iBuyers present a dramatic shift in how people can buy and sell homes without hiring a real estate agent.
When selling a home to an iBuyer, you’ll need to provide your home’s age, size, condition, and zip code. The company will then use an automated valuation model. This computerized appraisal looks at homes with similar specifics to yours to estimate their market value and make a cash offer.
How Does an iBuyer Compare to Traditional Companies?
Traditional companies have long and complicated home selling processes. Going the traditional way requires a lot of time and effort. From gathering a lot of paperwork to hiring a listing agent and a real estate attorney, the entire process can be painfully complex.
With an iBuyer, though, the company does the heavy lifting for you. So whether you’re selling or buying a house, you only need to provide a few specifics about your home and get an offer.
How Do iBuyers Work?
How iBuyers operate varies depending on the company you work with. Generally, the primary goal for these companies is to get you through the home buying or selling process quickly and effortlessly. Here’s how an iBuyer business model works:
Selling Your Home
To sell your home to an iBuyer, you’ll need to provide basic information about your property, including age, size, condition, and address, using the company website or app. Using the information provided, the company will estimate the value of your home and send you an instant offer.
If you agree to the offer, the iBuyer will send a home inspector to check the condition of your property. The company may subtract the cost of any repairs needed and then provide the final offer. You’ll receive the payment in a couple of days once you close the sale.
Buying A Home
If you’re interested in buying a home from an iBuyer, shop around for iBuyer companies. Some of the biggest iBuyers include Offerpad, Opendoor, and RedfinNow. Once you’ve found one, browse homes for sale on iBuyer websites, notify the company about the listings you’re interested in, and schedule times to visit.
Properties sold by iBuyers are ready for occupation since these companies fix them before listing. However, it’s a good idea to get an independent home inspection. Finally, you can make an offer through your real estate agent or negotiate with the iBuyer about the final sale price.
Trade-in Your Home
Some iBuyer companies accept trade-ins. When you trade in your home with an iBuyer, they will make a cash offer on a new home you’re looking to purchase and sell your current home and keep the money.
This works very similarly to a trade-in on a car purchase. However, the iBuyer may charge you any additional costs incurred through the process.
Listing Your Home
You can also list your home through an iBuyer and work with your real estate agent to sell the house. The listing process varies from one iBuyer to another, so ensure you research how the company works before working with them.
Submit an online application form to inquire about Angel Oak Mortgage Solutions financing options.
Buy a home or refinance your existing mortgage with Zero Mortgage.
Older homeowners can get peace of mind and added financial security with a reverse mortgage from AAG.
Is Selling/Buying With an iBuyer Worth It?
Whether you’re buying or selling a home, working with an iBuyer can simplify the entire process and help you avoid additional costs.
As a home seller, working with an iBuyer may be beneficial if you:
- Want to avoid the hassle that comes with the traditional home sale and sell your home quickly
- Need to sell your home without involving a real estate agent
- Are looking to avoid staging your home to attract potential buyers
As a home buyer, it is worth it to work with an iBuyer if you:
- Require to close on the sale in a matter of days
- Want a move-in-ready home
- Ready to buy without an agent
Costs Of Selling Your Home To an iBuyer
Here are three common costs of selling your home to an iBuyer.
Service Fees
The convenience of selling your home faster through an iBuyer attracts a service fee, a percentage of the sale price. Services fees vary by iBuyer, but typically anywhere between 5% to 7% of the sale price.
Opportunity Costs
Opportunity cost is the potential benefits you could miss out on by choosing one option over another. In other words, it’s the difference between the iBuyer offer and what you could sell your house in an open market.
iBuyer companies insist that they offer fair market prices based on computer algorithms. For this reason, you can’t know whether you would have gotten a better purchase price if you conducted a traditional real estate transaction.
Discounts and Rewards
iBuyer companies purchase properties at discounted prices, meaning you may walk away with less money than expected. Some iBuyers offer rewards, though.
Benefits of Working With an iBuyer
Using an iBuyer to sell or buy a house offers several benefits, including:
Speed and Convenience
The main benefit of working with an iBuyer is the speed and convenience. The sale process is very fast, and you can close on the sale within a week or less. On top of that, not having to stage your home to make it appealing to potential buyers is a huge plus for sellers.
Certainty
When you use an iBuyer, you’re almost certain that your home will sell as long as your home meets the iBuyer requirements. Unfortunately, the traditional process cannot promise that a house will sell after listing.
Flexibility and Control
iBuyers offer instant cash offers within 24 hours, giving you monetary flexibility and control. Whether you’re in a time-restricted situation, want to relocate for a job opportunity, or want to sell your home quickly, using an iBuyer comes in handy. It’s also a good option for homeowners who want to avoid the hassle of buying and selling a house at the same time.
