An instant offer, or iBuyer, is a company or an individual that invests in real estate. The investor purchases a property as-is, meaning there are usually no conditions, repairs, or commissions. However, many iBuyer companies will expect you to pay around seven to 12% of the home’s cost as a service fee. You sell your home directly to the buyer, bypassing the agent, and the cash goes right into your hand.
iBuyers use an automated valuation model (AVM) technology that tells them how much to offer for your home. The AVM aggregates data points about comparable home sales to determine the right price to bid. Because iBuyers move quickly and make cash offers, they often purchase homes sight unseen.
How Does iBuying Work?
iBuying has seen exponential growth over the last few years. It has become a popular choice for people who need to sell problem properties or for anyone who just wants to cash out quickly.
If you’re interested in pursuing an iBuyer sale, you’ll first submit a request online with an iBuying company. You might have to fill out a questionnaire and include some photos and details about your home. Once the listing is live, you’ll start to receive offers from iBuyers.
Most iBuyers are on the lookout for properties to purchase and flip. Once your location is listed, the turnaround rate is usually very fast. You can often have an offer within 24 hours. You might even be able to close in as little as a week, although it can be longer depending on the agreement you make with the purchaser.
The iBuyer may inspect your home and adjust their offer based on the post-inspection valuation, although this doesn’t always happen. While this method of selling allows you to take the reins on the sale of your home, the offers are generally “take-it-or-leave-it,” and you won’t have a lot of time to consider your options.
Opendoor and Zillow are the biggest vendors for iBuyer transactions. There are thousands of prospective sellers attempting to list on these sites. The two of them accounted for a combined total of 86 percent of iBuyer purchase volume in 2019. Smaller platforms that offer this service include Offerpad, Redfin, Perch, and Knock, but they don’t come anywhere close to matching Opendoor and Zillow’s volume.
There are a few different pricing options when you’re dealing with an iBuyer.
The first and most popular option is the instant offer. As the name would imply, an instant offer is immediate. This is the most common pricing scheme you’ll see when working with an iBuyer. They will make an offer based on the data collected from the AVM, your questionnaire, and other publicly available market information. They submit their offer and follow through with the sale, often without visiting the site.
An adjusted offer is something you’ll see less frequently. Here, a representative for the iBuyer will assess the home and might dock the offer accordingly, depending on their findings.
So the real question is whether or not you’ll get a fair price selling on these platforms. Some people would say that these investors will offer you a price that’s significantly below house market value, while iBuyers, unsurprisingly, say this claim is false. Some iBuyers will offer an amount that’s closer to market price, but most are considerably lower. In some estimations, what you sacrifice on price you can make up for in expediency.
However, the price of the house itself is not the only financial consideration.
The Pros and Cons of an iBuyer Sale
People value iBuying because it allows the seller to bypass real estate agents. Plus, it will enable you to avoid the lengthy processes of listing, staging, hosting open houses, and showing the property. With an iBuyer, you can skip the line, close quickly, and get on with your life, and that’s the draw.
People enjoy the instant gratification that an iBuyer can offer, but that convenience comes at a price. While iBuyers may offer a decent price on the home itself, they can also charge seven to 12 percent of the home’s cost as a service fee for listing.
Why Choose REX Over an iBuyer?
While instant offers may hold a certain appeal for those looking to sell quickly, REX can help you sell the right way, get a fair price for your home, and save you a ton of money on commissions.
REX is not your typical real estate agency. We leverage technology to help you sell your home fast, and we do so without the typical commissions you would expect to pay an agent. We list through online channels like Zillow, where motivated buyers go to research, shop for properties, and save money on real estate.
Best of Both Worlds
If you place traditional realty and iBuyer sales at opposite ends of the spectrum, REX falls somewhere in the middle. Our AI-powered technology finds qualified homebuyers where they are. Combined with our innovative marketing approach, you can be sure your listing will get maximum exposure.
Instead of working on commission, our real estate professionals are salaried. With the pressure of commission out of the picture, you can rest easy and trust that REX will always work hard to make sure you get maximum value for your home.
You Are Our Priority
Simply put, we put your comfort, success, and satisfaction first. When you sell to an iBuyer, you’re just another number. But when you work with REX, you’re our number one priority, and that’s something you can count on.
No matter who you are or why you’re selling your home, you can trust REX to be by your side every step of the way. We’re not just a platform, we are a team, and we’ve always got your back. Reach out today to learn more about why it’s better to sell.