Preparing to sell your home can be a frustrating process. Should you make upgrades and renovations? Do you need to move out and stage your home? How long will the whole process take?
In a place like Wyoming, this can be an even more frustrating process. Tough winter weather may make certain repairs and renovations necessary. Homes can easily sit on the market for over 100 days or more. Sometimes working through this process is just not worth the time and hassle.
Fortunately, Wyoming does have a strong housing market and is expected to grow in 2019. Home values sit over $226,000, an increase of over 5% from a year ago. Values are also expected to rise another 3% in the coming year.
But even with this strong market, sellers often look to avoid the hassle of the homeselling process and look to close quickly. This could be driven by many factors including the strength, or weakness, of local markets.
If you’ve researched how to sell your home fast, you’ve probably already been inundated by ads offering to buy your home quickly and for all cash. By going with an all-cash buyer you ostensibly avoid the hassle of preparing your home for sale and putting it on the market.
An all-cash offer may seem like a great option, after all you get a quick sale and avoid most of the work, but is it a good idea?
Are “We Buy Houses for Cash” Companies Legit?
Most of the time an iBuyer’s offer is too good to be true. In fact, cash offers by iBuyers, and similar companies are rejected by 9 out of 10 sellers. There is a reason for this and that typically comes down to the value most sellers leave on the table with iBuyers.
Consider the iBuyer’s business model. They are trying to quickly acquire a home for as much of a discount as possible, and then turn around and sell it for as much as they can. When they actually present you with an offer they already have a pre-determined maximum they are willing to spend based on your home, neighborhood, and the current housing market.
Based on those calculations, they will offer you an all cash deal anywhere from 20%, 30%, or even 50% below the true value of your home. This is because iBuyers are typically looking to make a 20% premium on the sale, charge around 9% in service fees, and tack on extra expenses for market risk and preparing the home for sale.
Opendoor, one of the oldest iBuyer companies online, has been looked at extensively. They typically list homes at 20% above the purchase price and charge 9% to sellers. This is 20% of the value of your home that you lost, around $45,000 on average in Wyoming. Additionally, you likely paid 3% more in fees than you would on a traditional real estate agent’s commission.
Lastly, you should be warned that there are also many all-cash scams. Typically, they look and sound too good to be true and offer very little detail about how the process works. Their offers can often be quite below market, which helps give them away.
In any case, what is clear is that by going with an all-cash offer, just to avoid the hassle of the home sale process, you are leaving significant money on the table in Wyoming. Overall, it can quickly add up and when totaled could easily reach well over $60,000 in lost profit on the average sale.
By working with an experienced, local real estate agent you can still get a quick turnaround on the sale of your home, but for a higher price — while saving money along the way.
iBuyer and Cash Buyer Reviews
There are many iBuyer and cash buyer businesses out there. They range from legitimate businesses like Zillow and Redfin all the way to small operations that “Buy Ugly Houses.”
Zillow Offers and Redfin Now are both similar in the iBuyer space. Zillow and Redfin have done business by offering an alternative home listing site and offering data services from all the homes listed on their platform.
Their move into the iBuyer space makes sense because of the data aggregation they do. They typically are able to present offers closer to market value, but still have to charge fees and cover the cost of preparing a home for sale.
You can expect fees in the 7% to 15% range (remember that is $33,000 in Wyoming) and additional costs for closing and other services like repairs. They also typically allow you 60 days before you have to move.
Opendoor and Offerpad are similar in that they will typically try to make a quick all-cash offer, but they don’t always come with the analytical approach that Zillow and Redfin count on as a built-in advantage.
Where these companies tend to hold a competitive advantage is in their operations and ability to quickly turn a home around once it is acquired. In fact, Opendoor quickly turns around a home for resale in 20 days.
Offers can sometimes be a bit lower, but services fees still generally hold in the 7%-15% range. These companies will also negotiate the price of repairs and renovations if your house needs them. While you may not be responsible for them yourself, they still could add up to additional costs that take away from your profit.
“Sell Your House for Cash” vs. a Full-Service, Local Real Estate Agent
An iBuyer is typically going to take a one-size-fits-all approach and look to make money on a low-ball offer. It may be a way to quickly get a home sold, but undoubtedly you will be leaving money on the table by accepting this offer or by not being willing to do some simple value adds on your own.
An expert agent will be responsive to your needs, help you negotiate a rent back if you are unable to move right away, and walk you through every step of the process. They will be experts in local market conditions and will be able to best market your home to buyers looking for a home in your neighborhood.
Working with a Clever Partner Agents will allow you to get your home sold quickly and for top dollar. You’ll also see considerable cost savings but still get full service. They charge a flat listing fee of $3,000 or 1% of the selling price if your home goes for more than $350,000. Get in contact with a Clever Partner Agent today.