iBuyer Companies: Everything Old is New Again
iBuyers are real estate investors who make instant cash offers (that's the "i" part) on houses, based on computer algorithms and other criteria. If the seller accepts, they can close within days. In turn, the iBuyer then handles marketing and reselling of the house to someone else for a profit.
An iBuyer is similar to the more familiar "instant buyers," "ugly house" buyers, or other investors who typically seek fixer-uppers to flip. But iBuyers look for value-added flips: liveable houses that only need minimal repairs or cosmetic improvements.
For homeowners who need to accelerate the home-selling process, iBuying or instant offer services enable home sellers to quickly sell their property to a company rather than to an individual.
When it comes to instant offer programs, there is no need to find a real estate agent, renovate your house, or show the property. An iBuyer company will present a cash offer in as little as 24 hours.
An iBuyer offer depends on an algorithm that weighs your home's condition, age, features, square footage, zip code, and local market trends then calculates a (below market) offer. You may also need to pay transaction and other fees or repair adjustments. By comparison, a Realtor who charges a 5% or 6% commission should get you the highest and best price when they market it on the MLS and other venues.
The seller who wants to minimize selling expenses
A personal representative settling an estate
The contingent buyer who need to move fast
A distressed homeowner looking to avoid foreclosure
The relocating seller on a short timeline
iBuyer companies don't want to buy everything. Most have "sweet spots" or niches such as homes valued from $200,000 to $400,000. Also, as new as this segment of the market is, most of the iBuyer companies are not profitable- they are still finding their way within the market. They are also not in every market and prefer metro areas with newer homes that are easier to value.
Instant-offer companies like Opendoor, Offerpad, and Zillow Offers purchase houses to "fix and flip." When working with an iBuyer, you are dealing directly with them. Their interest lies in getting the house for the least amount possible.
Working with an iBuyer service can be daunting. You should be represented by a professional who is looking out for your best interest. As your representative, we will discuss your options, navigate through the process, manage multiple iBuyers.