Should you sell your home to a “bot” that makes an instant offer over the Internet?
The experts don’t think so!
Online companies are referred to as “iBuyers”. They advertise low cost to the homeowner, selling for top dollar and a quick sale (not even having to prepare your home for showings). What they don’t tell you is the price that they usually give you is around $15,000 less than market value. These companies use an algorithm to price out your home which is not always accurate. Then they have their own contractors that do the inspection and charge you for repairs (usually these are inflated prices), which decreases your home price again.
In recent months, iBuyers have been roving the digital world to try to entice sellers with on-the-spot offers. They promise to cut selling costs by cutting out the middleman.
Lured in by the promise of a fast, fee-free sale, many sellers are learning some hard lessons about not getting fair market value. What’s more, iBuyers have been known to tack on extra costs at the last minute that actually exceeds traditional real estate fees.
Let’s cover some reasons why it’s important to use caution when thinking about selling your home to iBuyers.
Those Low Fees May Not Be Real
The big hook for most iBuyers is a promise of low fees. Sellers are understandably enticed by the idea of not paying agent fees. However, research shows that iBuyer fees can actually be around double what agent fees would be on the same house from a percentage perspective. While agents typically cost just 5 percent to 7 percent of a home’s sale price, iBuyers routinely charge 13 percent to 15 percent. While it seems like an iBuyer is doing you a favor by coming up with a quick offer, you’re actually the one paying the premium to not have to interact with the real estate market.
You’ll Likely Get Less Than Fair Market Value for Your Home
The big thing to keep in mind is that iBuyers won’t be living in your home. They need to purchase your home at less than fair market value in order to turn a profit on the investment. When you work with an agent to sell your home, you’re getting someone on your side who is motivated to get you the highest offer possible. The reality is that going with an iBuyer instead of listing your home the traditional way could actually cost you thousands and thousands of dollars. An investigation done by MarketWatch found that iBuyer offers actually netted sellers 11 percent less on average than owners who used the traditional agent route. That’s 11 percent gone from all of the hard work and value you’ve poured into your home. When combined with higher fees, this loss really leaves sellers coming up short.
It’s Not a Guarantee That iBuyers Want Your Home
It’s actually a myth that iBuyers provide guaranteed, automatic offers to sellers. The name of the game for iBuyers is smooth, generic transactions. That means that they often don’t engage with properties or sales that deviate from the norm in any way. In some cases, the location of your home could keep iBuyers from actually following through with offers. The time you lose by tangling with a “virtual buyer” becomes added time that your home spends sitting unsold. That means an extra month of paying all costs for a home that you need to be out of!
Sell Your Home With Help From a Trusted, Established Expert
By using a realtor, you can get top dollar for your home. You will also have someone who is looking out for your best interest and trying to fight for you. They will be negotiating every step of the way to ensure you get the best possible outcome and the most money. You will also have the benefit of their license and legal knowledge to protect you and guide you on what you can and cannot do.
A real estate agent is motivated to help you find the right buyer, get the best price for your home and sail through closing as quickly as possible. As a seller, it can be like the Wild West when you give up your right to have a Realtor working on your behalf.
If you’re selling a home in Arizona, let Keith and Janna Stevens of Stevens Realty help you make the most of the market. Our industry experience and personalized approach to getting homes sold can help you to get real offers from real buyers who are making offers based on a desire to call your house home. Reach out to us today!
We are Keith and Janna Stevens, and we’ve been in the realtor game for years now. We’ve learned a lot along the way and want to share that experience with you. Enjoy our blog, and when you’re ready to buy or sell your home, be sure to reach out to us!