Are you planning to sell your house? Do you want the best offer from a buyer or the fastest turnaround time, or both? Before putting your home on the market, consider the difference between selling with an iBuyer vs. a local real estate agent.
What is an iBuyer? If you’ve heard of HomeLight, Offerpad, or Opendoor, you’ve heard of an iBuyer. These are legitimate companies who will buy your home at a wholesale price, and after they've purchased it, they will sell it to someone else at retail price. Let's take a closer look at selling your house for the best price.
An iBuyer purchases your house for a low price then resales it at a higher price.
Everyone knows that when you buy a car, you aren't buying it for the wholesale price -- it has been marked up significantly. Let's say a car dealership is selling a mid-size car for $42,000. The dealership may have purchased the vehicle for only $32,000. Because of the markup, they're making quite a profit. Just wait until you hear the profit iBuyers make off of the sale of your home.
iBuyers offer to sell your home without listing it on the MLS and without having to go through showings and open houses. Not offering showings is appealing to some sellers because they don't want the trouble of having their home show-ready 24-7. In today's housing market, homes don't stay on the market for very long. So, despite the appeal of an iBuyer skipping the open houses and showings, you'll probably experience less of that with a real estate agent too.
iBuyers state they will offer you a competitive price for your home. Sounds good, doesn't it. Not so fast. Is the price comparable to what a real estate agent would list your home for and similar to the price other homes are selling for in your area? Are you saving or losing money with an iBuyer?
Start by getting a price for your home from an iBuyer AND a local real estate agent. There will be a difference in value. Even if you're in a big hurry to sell your house and don't care about profit (really?), you'll want to take a minute to compare the selling price provided by both the iBuyer and the agent. iBuyers will typically buy your house from you at a wholesale price (remember the car sale?). By asking an agent to price your home, you would most likely see that the iBuyer offer is lower. You could be losing $1000's on the sale of your house by choosing an iBuyer over a real estate agent. Wait, there's more!
A real estate agent can show you your home's value based on comps from other homes that have recently sold in your area (most accurate pricing). Your agent will also use a local home appraiser to assess the value of your home.
NOTE: Ask your agent to have your house appraised by a local appraiser to compare it to the iBuyer appraised value. An iBuyer may use a national appraiser who has never stepped foot in your home or other homes in the area.
Imagine an iBuyer telling you they will give you $660,000 for your home. After closing costs and fees, you get $607,200. It sounds like a lot of money, but let's see what the real estate agent has to offer.
Your agent has your house appraised, compares it to similar, recently sold homes, and determines the value to be $750,000. Keep in mind that there could be a bidding war driving the price of your home up even more in today's market. After closing costs, you leave with $699,200. Comparing the iBuyer home price to that of your agent, you're left with a difference of $92,000! That, my friend, is the difference between an iBuyer selling your home wholesale and your agent selling it at retail price. You could lose $92,000 by not consulting with a local real estate agent.
Imagine losing $92,000 on the sale of your home
because you didn't consult with a local real estate agent
To make the most money on the sale of your home, give serious consideration to hiring a local real estate agent vs. an iBuyer. Some agents work side-by-side with iBuyers to provide you with the best outcome when selling your house. Your real estate agent's office may even offer its own iBuyer program.
Need help finding a local real estate agent? Let us know at firstname.lastname@example.org .