If you’ve ever sold a property before, you know that the process can be long and stressful.
While some sellers can wait a few months for the perfect offer, not everyone has the luxury of time. For those of us who need to make a quick sale, iBuyers might just be the answer.
In this guide, we’re going to give you a crash course of everything you need to know about this popular up-and-coming real estate market.
The standard sales process involves listing your home, staging, hosting an open house, conducting showings, and waiting for offers. Once you’ve received and accepted a bid, you need to wait for the funds to clear. Even if you involve a real estate agency, the process is arduous and littered with pitfalls. When you need to make a quick sale, it can also seem wasteful and ineffective.
iBuyers are companies that buy houses directly from owners. Instead of going through a lengthy sales process, almost everything takes place electronically.
Most often, an iBuyer will need you to complete a form or submit specific information for review. The company may ask:
The iBuyer will evaluate the information and determine a good value for your home before making a cash offer. Sellers are free to accept or decline, but they’ll begin processing the sale immediately if you agree.
Keep in mind that the company may insist on inspecting your home and can change the terms of their offer after doing so. They can also elect to withdraw their offer completely.
“Hard” iBuyers are much like flippers. They buy your house in cash, becoming the outright owner. Then, they fix it up and flip it. Some best iBuyer companies, like Opendoor, Zillow, and Offerpad, are “hard” buyers. Opendoor is also the oldest and was the first company to use the model.
“Soft” iBuyers like Knock and Orchard may not buy your home outright. Instead, they’ll help you buy your new house first. Once you’ve relocated, they’ll list and sell the old one to make their money back. At that point, you can refinance your new property into a conventional loan.
If you’re thinking that selling to an iBuyer is easy, think again. While the process is extremely simplified compared to the standard process, these companies are careful about which homes they buy. Many will have strict criteria your house needs to meet before they make an offer.
Most commonly, iBuyers will look at houses that are:
While they may be lenient on some of these requirements, the offer you receive will likely reflect the company’s risk.
Some people may want to wait for the ideal offer to come along before they sell their home. If you have the time, the traditional process could still be the best way to go. However, if you’re looking for a simple, effective, and fast way to close a deal, an iBuyer might be the right option for you.
Depending on your requirements, you might want to consider either a “soft” or “hard” iBuyer. It’s also essential to keep in mind that your home's condition, location, and age will affect the offer you receive. Keep in mind that last-minute withdrawals can happen, so always practice full disclosure if you want a serious offer.
Is it worth selling to an iBuyer? Yes. Should you do it? It depends on your circumstances. Always consider your options carefully, and choose the best one that fits your needs.
Felix is the founder of Society of Speed, an automotive journal covering the unique lifestyle of supercar owners. Alongside automotive journalism, Felix recently graduated from university with a finance degree and enjoys helping students and other young founders grow their projects.