When it comes time to sell your home, there are several decisions you need to make – including which type of transaction is best for you. Should you hire an approved real estate agent, Sell your home without a broker, or work with an iBuyer? You probably considered the first two options. However, you may never have thought about an iBuyer before and you may have a wide variety of questions about what iBuyers are and how they work. Don’t worry, we have the answers for you.
Before you put your home up for sale, you should understand all of the options. Learn how selling to an iBuyer is different from the traditional home sale process and when you should consider selling your home for a direct cash offer.
What is an iBuyer?
An iBuyer (short for Instant Buyer) is a real estate company that buys a home from a homeowner in a quick cash transaction, makes any necessary improvements to the home, and then resells it. iBuyers offer quick and flexible closing dates as they buy your home with a cash offer.
With iBuyers, the home sale process is usually faster and much easier. iBuyers relieve you of the hassle of traditional sales, such as finding the right broker, Prepare your home for sale, organize open houses and finally choose the right offer. Plus, there’s more peace of mind when selling your home for cash as you don’t have to worry about failing to get a buyer’s financing.
Note that iBuyers may not be available in all markets. The best thing to do is to do your research in your local pub Real estate market before you decide to sell your home to an iBuyer.
How is selling your home to an iBuyer different from a traditional sale?
Selling your home to an iBuyer skips many of the traditional aspects of home sales. For example, you don’t have to worry about getting your home ready for sale. You can forego tasks like staging your home, upgrading your curb, or planning maintenance work on your home. Additionally, you don’t have to find a broker to sell your home.
A traditional sale requires you to get your home on the market before receiving any offers. To get a quote from an iBuyer, you can simply request a quote from their website by providing the required photos and information about your home. Your offer is usually based on the value of your home and the information you provide. Many iBuyer use this information in addition to a House valuation tool to help you create your offer. Depending on the company, you will receive your offer within a few days.
One of the perks of selling your home to an iBuyer is the ability to close at will. They can close within 10 days or up to 90 days. Unlike a traditional sale, this allows you to close when it works best for you. For those who buy and sell at the same time, this can be especially helpful when trying to find one second mortgage or gap funding.
What is the cost of selling a home to an iBuyer?
If you are considering selling your home to an iBuyer, it’s important to know how much it can cost compared to a traditional home sale. When you sell your home in the market, the seller usually pays both the buyer’s commission and the seller’s commission. The commission cost can vary between 4.5-7% of the final sale price of your home. You can also be expected to pay Closing costs which can range from 2-5% of the selling price of the home. However, you can spend more to sell your home with pre-listing repairs and upgrades, hiring a stager, or getting a professional housekeeping service.
On the other hand, selling to an iBuyer can cost anywhere from 6 to 14% of the final sale price. However, there are several reasons for this cost. Many iBuyers will offer you an initial price for your home and then deduct fees and closing costs. Depending on the iBuyer you work with, these fees can be sales fees, service fees, and repair fees and can range from 5% to 13%. These fees may vary based on housing market conditions or the number of repairs to your home.
When you sell your home to an iBuyer, the closing costs are also expected like you would with a traditional home sale prepare for the closure, which covers title, escrow and taxes. These costs are usually 1-2% of the final sales price.
Why sell your home to an iBuyer?
There are several reasons you might want to do this sell your house fast Instead of selling your home in a traditional sale, use an iBuyer. Let’s take a look at some of the most common reasons selling to an iBuyer can be a great option.
they move: If you’re moving to a new town and need to sell your current home quickly, selling to an iBuyer can be a great option. You can sell your home quickly without going through the home sale process while you’re in the middle of a move or live in another state.
You inherited a house: If you recently inherited a home, you may not have the resources to maintain the home or you may not want to convert it into a rental property. If you plan sell an inherited house, it might be the right option to sell it to an iBuyer quickly.
You have an investment or rental property: If you’re struggling to find a new tenant for your investment or rental property, a quick cash transaction might be the solution you’re looking for.
You need to access your home equity ASAP: Depending on your financial situation, you may need quick access to your home equity. If this sounds like you, then accepting a cash offer from an iBuying company might be the right choice.
You need money for a deposit: If you move, you may need to tap into the equity of your current home in order to do so to pay a deposit to a new home. In this scenario, selling your home to iBuyers could be the best way to get a better deal on your next home.
Remember, these are just a few of the reasons selling your home to an iBuyer can be the best way to go. Always take your personal circumstances into account and be guided by one Real estate agent or financial professional if you are not sure.
Are there any downsides in selling your home to an iBuyer?
When deciding the best way to sell your home there may be a few reasons why selling to an iBuyer might not be the right choice.
A cost increase: As mentioned earlier, the cost of selling to an iBuyer can sometimes be higher than what you would pay on a traditional home sale. If you’ve recently updated your home or are in no rush to sell it, listing your home on the MLS may be a better option.
iBuyers are not available in every market: While selling to an iBuyer is the best option for you, it is possible that they do not do business in your area. Not all iBuying companies buy homes in every market, so it’s always important to look for iBuyers in your area before committing to the idea.
Miss a potential bidding battle: You lose the ability to start a bidding war on your home when you sell your home to an iBuyer. This can be a disadvantage, especially in a seller’s market where bidding wars are more common and there are more buyers than houses for sale. If you’re in no rush and want to sell your home for the lowest price possible, working with an experienced real estate agent may be a better option.
Your home may not be eligible: Depending on the iBuying company you work with, they may have different qualifications that your home must meet in order to receive a quote. These eligibility requirements can be a minimum home value or depend on the current condition of your home.
Current iBuying behavior
Many iBuying companies paused home buying in 2020 during the coronavirus pandemic that crippled much of the global economy, but have since started home buying again. According to a recent Redfin study iBuyers home purchases up 20.6% in the first quarter of 2021. Raleigh, NC, and Charlotte, NC were the main markets for iBuyers buying houses during this period. However, if you are thinking of selling your home to an iBuyer anytime soon, keep in mind that iBuyers don’t serve every market.
Important insights into selling your home to an iBuyer
Selling your home to an iBuyer can be the right solution when you need to sell your home quickly, need access to your home equity, or just don’t have the time to get your home ready for sale. Whether you decide to sell your home on iBuyers or in a traditional sale, it is important to weigh all the pros and cons, and your personal situation, to make your home sale process a breeze.