iBuyers are the newest way in which real estate is being changed by technology. They make the selling process much faster and more accessible! It’s a development that has the potential to help a lot of people! And, as iBuyers experience more growth and success, they will push the technology that makes them possible to improve.
What does iBuyer stand for?
iBuyer does not stand for internet buyer. Surprise! It stands for Instant Buyer! Artificial Intelligence uses an Automatic Valuation Model (AVM). That’s how you can get an offer right away!
What is an iBuyer?
An iBuyer is a business that uses technology to make offers on your home right away. For many, iBuyers offer a convenient alternative to buying a home the traditional way. Not all iBuyers are the same, but what they have in common is that they make an offer on your home based on their estimate of your home’s value. If you say yes they end up owning, marketing and reselling your home. Two benefits of iBuyers for you are that the sale is made entirely in cash and you get added certainty about when you move.
What are the iBuyer business models?
iBuyers take several routes to achieve their ends. That’s good news for you because you have more options to choose from!
A cash offer is appealing to sellers who want to sell fast, don’t want to do any repairs, and need cash fast too. You won’t get top dollar for your home, however, and are likely to sell at a slight discount relative to fair market value because the iBuyer knows you want to sell quickly.
If you want to sell and buy your home at the same time then a trade-in is the option for you. The process is as follows: you find the home you want to buy and the iBuyer makes a cash offer that will facilitate that purchase. You move into your new home while your old abode is put up for sale.
There are some variations of what happens once you move into your new home. You may make payments on your previous mortgage until your old home is sold (this is to take care of any outstanding costs associated with the purchase of the new home). You may rent the new home until your old one sells. You may also sell the old home to the iBuyer at a predetermined price if the old home doesn’t sell. It’s also possible to get a mortgage through the iBuying company using the profits from the sale of your old home.
Why sell your house for cash?
There are several reasons an iBuyer might be the best pick for you. Speed, a cash offer, and ease of use are helpful in many situations, some of which you may not have even thought of!
You’ve made a contingent offer
If you’ve already found a home you want to move into but can only do so once your old home is sold, then an iBuyer could be a good way to go because you’ll have your home sold quickly.
You’re relocating for work
Got a job offer far from home and need to relocate fast? An iBuyer could have you out of your house fast thanks to that cash offer and accelerated closing.
You’re getting divorced
Need to split the profits from the sale of your home fast with your ex? An iBuyer can make that happen!
You’ve inherited property
Did you just inherit a property but you don’t want to move in or rent it? An iBuyer can be a way for you to get the cash you want!
You’re getting rid of a rental property
Got a rental property you want to move? An iBuyer can help! This is even the case if you already have renters, so you don’t have to worry about all the extra work of dealing with tenants.
You just don’t want the hassle of listing
Not wanting to deal with selling a house is a good reason to work with an iBuyer. Selling a house is a lot of work! Cleaning, staging, marketing, negotiations; you don’t have to do any of it if you go with an iBuyer.
What is the iBuyer process?
The iBuyer process is pretty straightforward, which makes it ideal for people who need to sell fast, need money fast, or want to be done with moving fast! Nonetheless, you need to keep track of every step to make sure it goes as smoothly as it can.
Submit a request for an offer:
In under five minutes, you’ll complete a brief online questionnaire about your home. That’s the first step.
Receive your offer:
Most often, if you’re dealing with a company as big as Zillow, for example, you’ll get an offer within a few days.
Review and accept the offer:
Read over the offer you’ve gotten. The assistance of a local real estate agent may help. If you decide to accept the offer then a lot of the heavy lifting is already finished.
Prepare for the home evaluation:
Your iBuyer will schedule a home evaluation at this time. Don’t worry about doing anything since your home’s going to be sold as is! Just make sure the whole home is ready to be inspected.
Agree to a final price:
Once the evaluation is complete, you’ll get the results in extensive detail. If you’re working with an agent, they can help nail down the final price and finish up the paperwork.
Choose a closing date:
Your closing can be scheduled as early as a week after a final price is reached, or upwards of 90 days later in some cases. You set the date, so choose wisely!
What about closing costs:
Closing costs are, conveniently, included in the initial offer. They cover your portion of what would normally be associated with the closing–title fees, taxes, and insurance! The iBuyer is likely to have a service feed that makes up for all the costs associated with buying your home and the associated risks. If you used a real estate agent you’ll have to pay their commission as well.
What are iBuyer benefits?
There are many reasons to work with an iBuyer. You work with a reliable buyer. You don’t need to schedule an open house or ever stage your home. You save on closing costs because you don’t have to worry about repairs, upgrades, agent commissions etc! You also don’t have to negotiate with your buyer or worry about them backing out at the last minute. In fact, you choose the last minute because you pick the closing date (and you don’t have to worry about delays or waiting for approval). That closing date will come no later than 90 days, and most often much earlier.
What are iBuyer drawbacks?
The downside of an iBuyer is that the convenience often translates to a lower selling price. Since the iBuyer is AI they’re not susceptible to developing an emotional attachment to the home that may lead to a more generous offer. There is the aforementioned risk of being scammed, although if you do your research you should be safe. The biggest drawback isn’t even a drawback; it’s lack of access. iBuyers are not available everywhere. A huge city like New York doesn’t yet have a robust iBuyer presence because it’s a hard market to break into; nor do communities that are very small.
How do I avoid iBuyer scams?
Do your due diligence because “we buy homes” scams are aplenty. Watch out for companies that ask for money upfront because no money should change hands until closing day. And when money is finally traded it’s going to be handled by a third party.
How do I compare iBuyer offers?
Don’t just go with the first iBuyer you come across! See how many customers they’ve served and how long they’ve been in business. Check their reviews! Not every customer will be satisfied, but the majority should be! Make sure that the services offered are robust. It’s really helpful if the iBuyer takes care of the repairs rather than you or if they offer trade-ins. And, of course, make sure the offer is one you want!
What are the costs associated with selling your house to an iBuyer?
Conveniently, closing costs are a part of the initial offer. Title fees, taxes, insurance, service fees, etc are all known right away. Don’t forget commission, though, if you decide to work with an agent.
Who are the top iBuyer companies?
The cream of the crop iBuyers include:
Which iBuyer is best?
The best iBuyer is the iBuyer that’s best for you! Do your due diligence and you’ll find one that works for you…if there’s one working near you!
Bottom Line on iBuyers
iBuyers can be a great asset if you need to sell fast. Since there are always cases where people need to sell fast, expect iBuyers to expand into your area sooner rather than later. And, with enough success, iBuyers will hopefully provide their services in places that would otherwise be cost-prohibitive.