iBuyers – Convenient at a Price
There is an increasing number of real estate companies, termed iBuyers, like Open Door, Zillow and Knock. They market a service called Convenient at a Price. It appeals to homeowners. The pitch for these quick cash offer companies will include some variation of “let us buy your home in days without the normal hassles of listing.”
The approach attempts to provide an alternative to selling a home in a normal manner. However, it might have an expense of not realizing the full equity a homeowner is entitled. Above all, there is no fiduciary relationship that requires the broker to put a seller’s best interest above their own interest.
An iBuyer does not represent a seller. It does not owe client-level services like loyalty and obedience disclosure required by most state license laws.
The offer is based on an automated valuation model, many times, without a physical inspection of the home. In some cases, a contract is written but there are provisions that allow iBuyers time to possibly “flip” the property to an investor. Occasionally they use an “out” in the contract to void the sale.
The reality is that a company cannot stay in business if they pay too much for the property. The iBuyer becomes the Seller who now must be concerned with pricing the home properly. They cover the normal selling expenses. Additionally they cover the repairs, improvements, and holding costs that could incur until the property sells.
There could be circumstances that make it necessary for a homeowner to sell their home at a discount. For instance, the seller could be in a distressed situation needing immediate cash. They might need a quick sale and don’t want to bother with repairs or marketing efforts. Or possibly, they may have found their next home and need to act quickly. The instant liquidity comes at a cost to the seller in lower proceeds from the sale.
To realize the maximum possible equity, a real estate professional in your area can advise you about the fair market value of your home. They will also provide a reasonably expected sales price, the costs involved and how long it will take.
In conclusion, you owe it to yourself and your family to find out what you can expect if you take a conventional sales route.
Written by: BetterHomeowners.com/TimBurrell
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