Technology has altered nearly every aspect of our lives, including how we buy and sell homes. A new wave of real estate technology has brought about iBuying. These businesses first appeared in 2013 and use technology to offer to purchase your home for cash. They then take care of marketing and selling the house to the next owner themselves.
Unlike house flippers, iBuyers are looking for homes that are already in good condition. They may make minor repairs and modifications, but do not do full scale remodeling. They use proprietary software called an automated valuation model (AVM) to determine a fair market value to pay for your home.
iBuying is not available in all locations currently. Check with the iBuyer you want to work with (such as Opendoor, Offer Pad, or Redfin) to see if they are buying homes in your area.
Decide if using an iBuyer is a good plan for selling your home by keeping in mind these considerations:
You want to make the selling process as simple as possible
iBuyers eliminate much of the uncertainty about selling a home. You don’t need to wait for the right buyer to come along or loans to process. Your sale is guaranteed without ever listing it or working with a real estate agent to determine an asking price. There are no closing costs, appraisals, inspections, or warranties involved in these transactions.
iBuyers don’t need to wait for financing or underwriting - the things that hold up traditional real estate transactions. Your profit may be slightly lower than what you could get from an individual buyer, but advantage is the streamlined process and the elimination of uncertainty. These companies complete the transaction quickly and efficiently, and allow you to focus on purchasing your new home instead of staging for showings and waiting for lenders and inspectors to make recommendations that can change the outcome of your sale.
You want a cash offer
You won’t have to wait for a financier to determine if a buyer is approved for a loan or go through an appraisal and home inspection. Most companies will present you will an all cash offer within 48 hours of a request. After all, the i in iBuyer stands for instant. The company may decline to make an offer if your home is not a style or in a location that they are interested in though. Factors such as the condition of your home and the current housing market will determine if you pocket more money with an iBuyer or a realtor, so do some research on both before making a decision.
Because the iBuyer will go on to sell your home, they will offer you slightly less than market value. The advantage is that the offer is all cash, guaranteed, and fast.
Your home is in good condition and you want someone else to take care of minor repairs
The iBuyer will visit for a home assessment to determine the condition and what updates will need to be made. If there are minor repairs needed, they will deduct the cost from your cash offer and take care of the labor and supplies themselves. You won’t have to worry about fixing anything quickly before your closing date. You are strictly selling your home as-is.
You want to choose your moving date
You choose the date you want to close on your property. Most iBuyers have a wide range of acceptable terms for closing to best meet the seller’s needs. If you need to start a new job in a few weeks or have to wait a few months for your dream home to be available, an iBuyer can easily adjust your closing date to match your situation. Some will even allow you to live in the house for a short time after closing.
If you are looking for a quick guaranteed sale, an iBuyer can offer you the security of knowing your home will sell at a reasonable price. You will easily be able to focus on buying your next home instead of working with real estate agents and potential buyers. With a small reduction in your overall profit, you gain confidence that the sale will be completed quickly and easily. Requesting an offer from an iBuyer does not commit you to selling to them, so carefully consider all your options when you are ready to sell.