iBuyers like Zillow, Opendoor, and Offerpad aim to decrease the time it takes to sell a house by purchasing houses for cash. This means that sellers don't have to decide between multiple bidders, wait for buyers to secure financing, or deal with many of the other stresses commonly associated with selling a home.
However, while selling to an iBuyer can help you sell your house quickly — as quick as seven days — the expedited process comes with a steep cost. Service fees can be as high as 14% of the closing price, which will likely be below market value.
If you need to sell quickly, an iBuyer can help you out. But it's still a good idea to evaluate all your options — including an experienced agent.
To help you make a decision, here's what you need to know about selling to an iBuyer.
Advantages of Selling to an iBuyer
Selling to an iBuyer can be an appealing option for two types of home sellers: those that need to sell their homes quickly, and those who simply don't want to deal with the hassle and drudgery of staging, listing, and selling a home.
Just like sending a letter through express mail costs a premium, so does selling a house through an express selling service.
The fees that iBuyers charge for their expedited home buying services can be up to 14% of the closing price.
Sellers that need to make small improvements or repairs on their homes before putting them on the market may find iBuyers to be an attractive option. Zillow, Offerpad, and Opendoor are willing to buy houses in need of some repairs, but homeowners will take a financial hit when selling to them. Most iBuyers, however, will not buy homes that need major repairs.
Overall, selling to an iBuyer can be a relief to sellers who are overworked or simply don't want to deal with the added stress that comes with getting the home ready for market or waiting for offers.
Disadvantages of Selling to an iBuyer
Unless you are faced with personal or financial circumstances that require you to immediately sell your house, working with an experienced real estate agent is the better option in most scenarios. Not only do real estate agents charge lower fees, but they can also get you a higher price for your home, which means more money in your pocket when all is said and done.
While iBuyers will charge up to 14% of the agreed upon purchase price in fees, a typical real estate agent only charges a 3% commission fee. This means that when selling your home the traditional way, you'll pay a total of 6% in commission: 3% for the buyer's agent, and 3% for your own agent.
Real estate agents also bring with them a wealth of home selling experience. They can use their professional network to find buyers, negotiate with buyers to get you a better price, and help you time the market to get the best possible price on your home.
The Bottom Line
When it comes to selling a house, iBuyers get the job done fast, but at a cost. If you need to sell in a matter of days, an iBuyer's offer (even below market value) is worth it to get the selling process over.
And since iBuyer offers are not legally binding, it never hurts to get an offer and see if it's the right fit for your situation.
If you've got more flexibility in your selling timeline, talk with a local agent and find out how quickly — and for how much — they can sell your home. Having all the information will help you determine the best way to sell your home.
popup-modal text= "Reach out and get connected"] with a top real estate agent in your area to find out how they can help you meet your selling goals.