Read This Before Choosing an iBuyer Company

By 

Michelle Delgado

Updated 

February 26th, 2021

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Pros & cons | Top iBuyer companies | Selection criteria | Locations

🔑 Key takeaways
  • iBuyer companies make cash offers on homes, then resell them
  • iBuyers currently operate in 34 cities across 15 U.S. states
  • The three biggest iBuyer companies are Opendoor, Zillow Offers, and Offerpad
  • Those interested in iBuyers should also consider home trade-in services, Orchard and Knock

Since 2014, iBuyer companies have offered an alternative to traditional real estate sales. In general, iBuyers use proprietary technology and real estate know-how to make cash offers on homes that meet their criteria.

Currently, the biggest iBuyer companies are Opendoor, Zillow Offers, and Offerpad by transaction volume,[1] according to real estate expert Mike DelPrete. Redfin also has its own iBuying program called Redfin Now.

Similar companies include Orchard and Knock, which offer home trade-in programs in a twist on the typical iBuying model.

Overall, we recommend choosing an iBuyer by evaluating:

  • What's available in your area
  • Which company will provide the most competitive offer

You’re always free to submit your information to a variety of iBuyers so you can compare their cash offers up front. Just be sure to factor in service fees — and the possibility of repair costs later in the process.

Pros and cons

📈 Upsides of selling to an iBuyer:
  • You can close a deal fast — sometimes in as little as 10 days
  • You won’t have to spend time or money preparing, listing, and marketing your home
  • You’ll probably receive an offer that’s close to fair market value (though there’s always the possibility that you could earn more on the open market)
📉 Downsides of selling to an iBuyer:
  • You’ll have to pay steep service fees (think 5-15%, plus 1-3% closing costs in some cases)
  • You probably won’t get the same personalized service you would from a traditional real estate agent
  • Your home might not qualify, due to strict selection criteria

» READ: A beginner’s guide to iBuyers

Top iBuyer companies in 2021

Opendoor

Full Review

Service Fee

3.5-5%

Closing Date Window

14-60 days

Average Rating

4.05/5 (1,159 reviews)

Editor's Take
Pros & Cons
Locations
Reviews
Contact

Opendoor is a good option for home sellers who need a fast, predictable sale with minimal hassle. While the price that Opendoor pays might be slightly below the value of comparable homes on the open market, the difference might be worth it for people who value convenience and speed.

Pros

  • Low service fee compared to competitors
  • Additional in-house services, including Opendoor Home Loans & OD Title
  • Highly rated in customers' online reviews


Cons

  • Pays fair market value at most
  • Limited ability to negotiate
  • Buyers may find Opendoor's repairs insufficient

Opendoor is currently purchasing homes in 23 locations.

  • AZ: Phoenix, Tucson
  • CA: Los Angeles, Riverside, Sacramento, San Diego
  • CO: Denver 
  • FL: Jacksonville, Orlando, Tampa
  • GA: Atlanta 
  • MN: Minneapolis-St. Paul
  • NC: Asheville, Charlotte, Raleigh-Durham
  • NV: Las Vegas
  • OR: Portland
  • TN: Nashville
  • TX: Austin, Dallas-Fort Worth, Houston, San Antonio
  • UT: Salt Lake City

As of February 15, 2021, Opendoor's weighted average is 4.05/5 based on 1,159 reviews.

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Zillow Offers

Full Review

Service Fee

6% + 1.5-9%

Closing Date Window

7-90 days

Average Rating

Not available

Editor's Take
Pros & Cons
Locations
Reviews
Contact

Zillow Offers can be a convenient option for sellers — but its fees can potentially be higher than competitors. If you're in a market where there are multiple iBuyers, it's worth shopping around to find out which will give you the best cash offer.

Pros

  • Extra time to decide: Initial cash offers are valid for 5 business days
  • Generous closing window compared to competitors
  • Offers are typically within 1-2% of fair market value


Cons

  • Fees could total up to 13.9% (6% selling fees plus a maximum 7.9% in service fees)
  • Upselling: Zillow will try to get you to work with a premier agent, even if you decline its cash offer
  • No option to do repairs yourself

Zillow Offers currently purchases homes in 25 locations.

  • AZ: Phoenix, Tucson 
  • CA: Los Angeles, Riverside, Sacramento, San Diego 
  • CO: Colorado Springs, Denver, Fort Collins 
  • FL: Jacksonville, Miami, Orlando, Tampa 
  • GA: Atlanta MN: Minneapolis 
  • NC: Charlotte, Raleigh 
  • NV: Las Vegas 
  • OH: Cincinnati 
  • OR: Portland 
  • TN: Nashville 
  • TX: Austin, Dallas, Houston, San Antonio

As of February 15, 2021, Zillow Offers does not have any verified customer reviews on reputable third-party review sites.

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Offerpad

Full Review

Service Fee

6-10%

Closing Date Window

10-90 days

Average Rating

1.8/5 (57 reviews)

Editor's Take
Pros & Cons
Locations
Reviews
Contact

Offerpad promises the certainty of a cash offer and a fast closing on a date you choose. But its restrictive purchase agreement, hidden cancellation fee, and negative online reviews suggest it's riskier than other iBuyers.

Pros

  • Generous closing window compared to competitors
  • Late checkout option gives sellers up to 3 days to move out after closing
  • Access additional services, such as free local moves within 50 miles


Cons

  • You'll have to sign a binding contract before knowing the final offer price
  • You might face a 1% cancellation fee
  • Offerpad reserves the right to back out at any time

Offerpad is currently purchasing homes in 14 locations. 

  • AZ: Phoenix, Tucson 
  • AL: Birmingham 
  •  FL: Jacksonville, Orlando, Tampa 
  • GA: Atlanta 
  • NV: Las Vegas 
  • NC: Charlotte (+ neighboring parts of SC), Raleigh 
  • TX: Austin, Dallas-Fort Worth, Houston, San Antonio

As of February 15, 2021, Offerpad's average customer rating is 1.8/5 based on 57 reviews.

  • Website: www.offerpad.com
  • Phone: 844-388-4539
  • Email (Sellers): info@offerpad.com
  • Email (Buyers): buyers@offerpad.com
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RedfinNow

Full Review

Service Fee

6-12%

Closing Date Window

10-30 days

Average Rating

Not available

Editor's Take
Pros & Cons
Locations
Reviews
Contact

Compared to its competitors, RedfinNow handles a relatively small volume of iBuyer sales. However, RedfinNow shines in several niches, thanks to its willingness to accept older homes and its availability in a wide range of California cities. 

Pros

  • Expanded presence in cities across California, including several not served by other iBuyers
  • Large and trusted corporate brand
  • Older homes (built after 1930) are eligible in select cities


Cons

  • Relatively expensive services fees (up to 12% of the offer price)
  • Relatively limited flexibility on closing window, compared to competitors
  • Verified customer reviews are unavailable

RedfinNow is currently purchasing homes in 14 locations.

  • AZ: Phoenix 
  • CA: Inland Empire, Los Angeles, Orange County, Palm Springs, Sacramento, San Diego, San Francisco 
  • CO: Denver 
  • TX: Austin, Dallas, Houston, San Antonio 
  • WA: Seattle

As of February 15, 2021, RedfinNow does not have any verified customer reviews on reputable third-party review sites.

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Home trade-in services

Among iBuyers, there’s also a unique category of companies that offer home trade-in programs.

Orchard and Knock offer similar perks (including speed and certainty) but with a slightly different business model.

Instead of a cash offer, you’ll be able to coordinate buying a new home with the sale of your previous one.

Service Fee

6%

Closing Date Window

14-60 days

Average Rating

4.6/5 (97 reviews)

Editor's Take
Pros & Cons
Locations
Reviews
Contact

Orchard is a home trade-in service that allows you to purchase a new home by getting access to your current home's equity. You can then list your old home on the market with an Orchard listing agent.

If you need to move quickly, but still want to get top dollar for your home, Orchard is worth considering. However, Orchard only accepts newer homes compared to its competitors.

Pros

  • You'll have a generous 7-day window to consider Orchard's offer
  • Use Orchard's Offer Boost program to make a cash offer on a new home
  • If your home doesn't sell in 120 days, you can accept Orchard's guaranteed cash offer


Cons

  • Homes must be relatively new, compared to competitors (built after 1972 vs. 1930-1960)
  • Orchard's cash offers will likely be much lower than what you'd be able to sell for on the open market

Orchard is currently operating in nine locations.

  • CO: Colorado Springs, Denver 
  • GA: Atlanta 
  • NC: Charlotte, Raleigh-Durham 
  • TX: Austin, Dallas-Fort Worth, Houston, San Antonio

As of February 15, 2021, Orchard's average customer rating is 4.6/5 based on 97 reviews.

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Service Fee

1.25%

Closing Date Window

Varies

Average Rating

4.8/5 (710 reviews)

Editor's Take
Pros & Cons
Locations
Reviews
Contact

Knock allows customers to purchase a new home before selling their old one. Unlike typical iBuyers, you'll sell on the open market with a traditional real estate agent. Knock will cover your old mortgage until your home sells — but you'll still eventually have to settle up, and costs can add up fast if your home sits on the market.

Pros

  • You'll sell on the open market, potentially receiving offers above fair market value
  • $25,000 advance for home repairs before selling
  • Compared to competitors, Knock accepts older homes (built after 1930)


Cons

  • Fees can add up quickly if your home sits on the market
  • You'll have multiple points of contact rather than one dedicated agent
  • Buyers will need to be proactive and independent in their home search

Knock is currently operating in 15 locations.

  • AZ: Phoenix 
  • CO: Denver 
  • FL: Fort Lauderdale, Jacksonville, Miami, Orlando, Tampa, West Palm Beach 
  • GA: Atlanta 
  • NC: Charlotte, Raleigh-Durham 
  • TX: Austin, Dallas-Fort Worth, Houston, San Antonio

As of February 15, 2021, Knock's average customer rating is 4.8/5 based on 710 reviews.

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Which homes qualify for most iBuyers?

iBuyer companies try to earn a profit by reselling homes — so they’re picky about what homes qualify. In a nutshell, they want to acquire homes they believe they can sell quickly and for a good price.

We reviewed the terms of service for the six biggest iBuyer companies and found that most share similar criteria:

🏠 Type of home
Single family residential homes, condos, and townhomes
🌲 Lot size
0.5 to 1.5 acres
🕑 Age
Built after 1960
💰 Valuation
$100,000 - $600,000

Most iBuyer companies also look for homes that are owner-occupied and in good condition.

For example, an iBuyer might be happy to repaint your home or complete minor repairs — but major water damage, a cracked foundation, or unpermitted additions might cause them to back out.

If you’re not sure whether your home will qualify, it never hurts to submit your information. In most cases, you’ll receive your cash offer (or rejection) within 24-48 hours.

Finally, keep in mind that these are general criteria and exceptions do exist. Practically every iBuyer company offers a disclaimer that their practices vary according to the specific market you’re in.

Wondering how much your home is worth?

Clever's top-rated real estate agents can provide a comparative market analysis (CMA) to help you determine what your home is worth. A free, no-obligation CMA is a great way to compare your iBuyer offer to what your house might fetch on the open market.

Connect with an agent and get a free CMA today!

Which iBuyer companies are available in my state?

Currently, the six biggest iBuyer companies operate in cities across 34 cities across 15 U.S. states.

State
Availability
Alabama
  • Birmingham: Offerpad
Arizona
  • Phoenix: Knock, Offerpad, Opendoor, RedfinNow, Zillow Offers
  • Tucson: Offerpad, Zillow Offers
California
  • Inland Empire: RedfinNow
  • Los Angeles: Opendoor, RedfinNow, Zillow Offers
    Orange County: 
    RedfinNow
  • Palm Springs: RedfinNow
  • Riverside: Opendoor, Zillow Offers
    Sacramento: 
    Opendoor, RedfinNow, Zillow Offers
    San Diego: 
    RedfinNow, Zillow Offers
  • San Francisco: RedfinNow
Colorado
  • Colorado Springs: Orchard, Zillow Offers
  • Denver: Knock, Orchard, Opendoor, RedfinNow, Zillow Offers
  • Fort Collins: Zillow Offers
Florida
  • Fort Lauderdale: Knock
  • Jacksonville: Knock, Offerpad, Opendoor, Zillow Offers
  • Miami: Knock, Zillow Offers
  • Orlando: Knock, Offerpad, Opendoor, Zillow Offers
  • Tampa: Knock, Offerpad, Zillow Offers
  • West Palm Beach: Knock
Georgia
  • Atlanta: Knock, Offerpad, Opendoor, Orchard, Zillow Offers
Minnesota
  • Minneapolis-St. Paul: Opendoor, Zillow Offers
Nevada
  • Las Vegas: Offerpad, Opendoor, Zillow Offers
North Carolina
  • Charlotte: Knock, Offerpad, Opendoor, Orchard, Zillow Offers
  • Raleigh-Durham: Knock, Offerpad, Opendoor, Orchard, Zillow Offers
Ohio
  • Cincinnati: Zillow Offers
Oregon
  • Portland: Opendoor, Zillow Offers
Tennessee
  • Nashville: Opendoor, Zillow Offers
Texas
  • Austin: Knock, Offerpad, Opendoor, Orchard, RedfinNow, Zillow Offers
  • Dallas-Fort Worth: Knock, Offerpad, Opendoor, Orchard, RedfinNow, Zillow Offers
  • Houston: Knock, Offerpad, Opendoor, Orchard, RedfinNow, Zillow Offers
  • San Antonio: Knock, Offerpad, Opendoor, Orchard, RedfinNow, Zillow Offers
Utah
  • Salt Lake City: Opendoor
Washington
  • Seattle: RedfinNow

So far, iBuyers are primarily available on the west coast and in the south — but some companies have plans for expansion. For example, Opendoor has publicly announced that it plans to operate in 100 markets in the coming years.

Not eligible for iBuyers?

Looking for a real estate agent but short on time? Clever can connect you with top-rated listing agents in your area within 24 hours. 

Our network of agents work for pre-negotiated low rates: just $3,000 for any home under $350,000, or 1% for more expensive homes.

Submit the form below for a free, no-strings-attached phone consultation with one of our Licensed Concierges.

ARTICLE SOURCES
[1]

Mike DelPrete. "Opendoor, Zillow, and the iBuyer Business Model." Accessed February 15, 2021.