Although iBuyers are a relatively new model, they currently represent a growing percentage of real estate transactions and are the topic of conversation among real estate communities nationwide. The real estate market is constantly evolving, and iBuyers provide convenience and certainty to consumers who are looking to sell a home, buy the home of their dreams, and move on to the next chapter of their lives.
Ultimately iBuyers aren’t here to upend the industry but to help it evolve. At the end of the day, they share the same goal as real estate agents: to find the best solution to serve the needs of both the home buyer and seller. In fact, iBuyers can be a powerful tool for you to have in your arsenal when buying or selling your home.
If you’re not familiar with the iBuyer model, here are five important points to know:
1. iBuyers Can Benefit All Types of Buyer and Seller Needs
A good place to start is to understand if the iBuying model can serve your needs.
If any of these scenarios apply to you, an iBuyer may be a good option:
• You’re a seller who wants to move quickly or align your sale with a home purchase
• You’re a contingent buyer looking to be competitive in a hot real estate market
• You’re a seller who wants to avoid the risk of a buyer’s financing falling through
• You’re a seller who wants to skip the hassle of home prep and inconvenient showings
• You’re a seller who wants to look for a free, no-obligation 3rd party opinion on their home value
2. iBuyers Are Not Home Flippers
iBuyers are often mistaken for home flippers, but the model is fundamentally different.
While every iBuyer varies, most companies tend to buy mid-priced, residential homes that are in good condition.
Unlike a home flipper, their goal is to make minor repairs necessary for any resale, rather than targeting distressed properties that need major rehabs.
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3. iBuyers Provide Fair Market Offers
There’s been some talk in the industry that iBuyers purchase homes below market value, and that consumers aren’t getting a good deal when they sell to an iBuyer.
While most iBuyers do charge a fee that’s slightly higher than a typical real estate commission, a 2019 study from real estate tech expert Mike DelPrete found that iBuyers are offering fair market value for the homes they purchase—with a median discount to market value of around 1.3 percent.
And while selling a home on the open market may yield a higher sale price, the net cash proceeds to the seller are often offset by renovation costs and the likelihood of double moves or even double mortgages.
Sometimes the convenience, simplicity and certainty a cash offer provides may better suit your specific needs as a seller.
4. iBuyers Employ REALTORS®
It’s not well known that iBuyers employ licensed agents and that they are REALTOR® members.
iBuyer brokerages can be part of multiple state and local REALTOR® associations and are NAR members. These brokerage members participate in association committees and are contributors to REALTORS® Political Action Committee (RPAC) Major Investors. A
dditionally, these brokerages utilize the services of many MLSs across the nation to market their homes.
5. iBuyers Want to Work with Agents
Many iBuyers recognize that as a home seller or buyer you’ll often seek out an agent who can provide full-service guidance, local expertise, and/or negotiation skills. While every iBuyer differs in their approach to working with agents, here are a few examples of what collaboration with your agent might look like:
- Your agent may request a cash offer for your home sale.
- An iBuyer may pay a referral fee to agents who refer an unrepresented seller to their buyer—think of this like a broker-to-broker referral.
- Your agent may help you buy an iBuyer-owned home (and earn a commission).
- An iBuyer may give an agent referrals.
Conclusion: Don’t Rule iBuyers Out Without More Information
As the industry continues to evolve, home buyers and sellers can leverage iBuyers as a valuable resource — from helping you better understand the value of your home, to giving you more options for moving on to your next chapter.
thewriteDuffy
At home, April is a mom, wife, and DIY darling. Among other home projects, she helped her husband Dan renovate their 1986 bungalow and is currently designing and decorating the 2023 custom home they are building themselves. Professionally, April is a writer, author, and online marketer with 15 years of experience writing for newspapers and magazines, building online authority websites, and publishing books.
With any project, 80 percent of the work is done in the planning stage. We have simple checklists to help you get organized and make sure you’re prepared for every step along the way. Download them now for FREE: