If you needed to sell your home fast 30 years ago, you might have turned to an equity purchase company or sign buyer (“We Buy Houses for Cash!”). In the modern age, these buy-anything house-flippers make their offers online, and they go by the techy name “iBuyers.”
The business model, however, hasn’t changed. You fill out a quick form on an iBuyer site like Opendoor, Offerpad, Zillow, or Redfin, and they decide — sight unseen, with the help of an algorithm — what they think your property is worth. If you say yes to that offer, the deal can be closed in just a few days.
While iBuyers offer quick cash and convenience to desperate sellers, their process costs more in fees, inflated commission, and lost value than the service is ever worth.
If you’re really in a rush to sell your home, a full-service real estate agent is well equipped to help you sell fast without losing you money.
In fact, Clever Partner Agents work for a flat fee of $3,000 or just 1% commission for homes that sell for more than $350,000 — compared to the standard 3% taken by traditional agents.
How Do iBuyers Work?
There are some tempting reasons to turn to iBuyers: a cash deal, painless process, and of course, urgency. The key point to remember is that these companies exist to turn a profit. If you’re selling a house, that profit is yours to lose.
For starters, iBuyers typically charge a full commission — often exceeding 10%, far higher than that taken by a traditional seller’s agent.
On top of this are either fees or a built-in discount on the fair value of your home — sometimes both. You can think of this as the “liquidity premium” you pay as you exchange a potentially-risky property for cold hard cash.
And though these companies claim to be selling convenience, their real profit comes from flipping your house.
By buying on the cheap, especially in an economy with rising home prices, iBuyers can resell your house at an average price appreciation of 5.5%. That’s more money you’re leaving on the table by foregoing a proper valuation before selling.
Get a great price for your home and save on commissions.
Work with a full-service, experienced Clever Partner Agent for a flat fee.
Why Should a Seller Beware iBuyers?
Your home is your largest asset, and you want to pull out as much of your equity as possible when selling. iBuyers make their money by undervaluing your property and convincing you to sell cheap.
There’s a good reason 9 out of 10 consumers ultimately pass up their offers.
Even if these companies could accurately value your home online (they can’t), they can only make money by offering you less than what your house is worth.
And iBuyers are just as bad for the market as they are for sellers. By snapping up homes for less than a fair price, they devalue other properties in the neighborhood and make it harder for real buyers to find affordable listings.
Is There a Better Way to Sell Houses Fast?
iBuyers and other equity purchase companies are almost never the right move for sellers — even those who need to sell quickly.
An experienced real estate agent is just as capable of getting you a quick turnaround, for a lot less of your money.
Clever can help you sell your house quickly without losing you a fortune in fees. A Clever Partner Agent will help you get a proper valuation and fair market price, all for a flat fee of $3,000 or 1% if the home sells for more than $350,000.
Not only is that a lot better than an iBuyer’s cut, but it comes with the expert guidance and sales ability of a top-performing, full-service seller’s agent.