We’ve all seen the commercials with the couple on a front porch saying “Our house sat on the market for a year. Then we listed our home ourselves and sold within days.” It’s the same story over and over, but is it really true? The rise in iBuyers has left many people wondering “Is that right for me?” Before jumping into why iBuyers are absolutely not for everybody, it is important to know exactly what an iBuyer is and is not.
An iBuyer is basically a company or investor that places an offer on your home based on an algorithm. Once they have purchased the home, the company then resells it for a profit. While this may not initially sound like a bad thing, especially to a motivated seller it does have plenty of drawbacks as well.
Hidden Costs
A typical broker will charge typically 5-7% of the sale price for your home. It is clearly laid out in your contract and along with closing costs, a seller is generally not asked to pay for anything else. However, with an iBuyer there are multiple fees that may or more often not disclosed upfront. Typically, with an iBuyer, a “convenience fee” of 6-9.5% is the first requirement for a seller. They also require sellers to pay for fees typically paid for by the buyer. In total, iBuyer’s fees range from 7-10% of the selling costs. Which is a lot of money compared to a traditional broker.
Purchase Price
The purchase price when selling your home to an iBuyer may have some surprises as well. Remember, their goal is to resell your house for money. Their offer will not be market value for the home, it will be significantly less. As shown in a study by Collateral Analytics. The difference in the purchase price and market value was as much as 7%. This means that potentially your home will 
already be purchased for up to 7% of what would be a fair price, you will pay up to 10% of the selling price in fees. And the costs of using an iBuyer are still not complete.
Repair Costs
Along with charging a convenience fee and offering you below market value iBuyers typically also credit your home with repair costs. Which if your home is in disrepair and you are unable to do the repairs yourself it does sound like a feasible solution, however, some sellers have reported the repair costs going as high as $300 to simply replace 3 lightbulbs in the home. All of these repair “expenses” are costing you money, way more than what it would take to have fixed yourself.
All in all, using an iBuyer is rarely the correct choice for anybody. With sellers losing tens of thousands to these platforms based on false promises an agent will always be your best choice when preparing to sell your home.
I am passionate about Real Estate and
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Janet
Simons |
Certified Residential Specialist | Real
Estate Broker
Mountain Valley Real Estate
We all want to make sure we are living or are going to be living in a safe area. It is important to think about, especially now that children are starting to go back to school. There are various resources you can use to scope out a potential neighborhood or learn more about your own. Here are some of the best resources available:
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We’ve all been there either the washer dies and no amount of resuscitation can fix it, or the freezer has suddenly turned your house into a pool. Or even a new house needing all new appliances, it is hard to know exactly where to start! How do you find the best brands at the best prices? It’s a daunting task just to get started but here are some tips to help.
This is the part most people tend to dread when it comes to appliance shopping. There are so many places to look at reviews, and in some ways, it feels like a guessing game when it comes to what to get. The first place I would look is the website where you plan to purchase your appliance or appliances from. Where I live that narrows your store down to one option, for others there could be multiple places. But with your criteria in hand, you are able to quickly sort through what will and won’t work for you. Once you have a short list of options, start looking over reviews, even if you don’t plan to buy from that specific store the reviews are an invaluable resource for you. Other options for reviews would be Consumer Reports, J.D. Power, or Consumer Affairs website are all great options for reviews as well.
According to Zillow: “The Zestimate® home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user-submitted data, taking into account special features, location, and market conditions.” While this sounds like the data collected would be accurate, Zillow’s proprietary formula often leaves people scratching their heads.
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When did Christmas go from the most wonderful time of the year to the most stressful? Between the parties, the gifts, wrapping, travel, and sheer exhaustion it is easy to focus more on what is next on the calendar instead of enjoying the time spend with friends and family. How did Christmas lose its wonder and how do we get it back?
When preparing for Christmas it is easy to focus on the idea that everything needs to be perfect. The children NEED to have certain outfits on so the photos will look good, they must be frilly and stain free and you and your spouse must coordinate too. The food HAS to be perfectly cooked and has nothing but everybody’s favorites. The decorations MUST look as though they are straight out of a magazine. Why do we put all of that pressure on ourselves? I can just about guarantee you the only thing the kids are wondering is when they can take off the itchy dress and when can they open presents.
Life around the holidays can and will get chaotic. There are always last-minute gifts and a change of plans. Why not instead of letting this throw your day off completely think of how excited you are to see the family member who called 5 minutes ago to see if they can stop by? In the grand scheme of things will sitting for an hour to catch up be the end of the world? Of course, there are always exceptions to every rule but for the most part isn’t it more important to remember to enjoy the experiences life offers?
