i-buyers are companies like Opendoor, Offerpad, and Zillow are making direct offers to purchase properties. So instead of staging your home and waiting for somebody to make an offer, sellers can opt to sell to a third party and walk away.
The concept isn’t new. In the past local Cincinnati real estate companies have offered similar programs to consumers. These programs were especially handy in slow real estate markets when terrified sellers wanted to know their home was sold before taking on another mortgage.
The cost of the i-Buyer programs can deter sellers in this hot market. Why pay a higher fee to sell when buyers are pounding on doors looking to buy? Good question and according to the latest numbers 2/10ths of 1% of the American market is using i-buyers today. But in Phoenix where programs have been up and running for a few years, estimated usage is near 20%.
The iBuyer companies make cash offers for your current home using algorithms to determine “fair market value”. Since the deal can close in a very short time, sellers can take their money and move on. TThe transaction closes in a matter of days. It’s up to the iBuyer companies to clean up and fix up your house before selling it. However, iBuyers has to make some money so they usually don’t offer the maximum price for the property and some companies have added fees to cover costs. So sellers need to decide if the price of a guaranteed quick sale versus selling through the traditional method.
iBuyers offers an option to sellers who need a fast problem free closing and are willing to leave some money on the table. As buyers get pickier and more demanding about repairs and upgrades, iBuyers may be a great option for sellers to just sell and move on. However, there will always be sellers who want top dollar and will work through the selling process to get it.