If you’re a homeowner or want to become one soon, you should know that the process of buying or selling a home has changed in the past couple of decades. Things like home improvement loans, mortgages, and realtors are still relevant. However, there are relatively new home buying and selling options as well.
We’ll talk about one of them, called an iBuyer, in the following article. If you’re thinking about using one, you should understand the concept fully before pursuing it.
An iBuyer is an “instant buyer.” It’s a business model whereas a homeowner, you work with a real estate company that gives you a nearly instant quote for your house when you decide that you want to sell it.
The iBuyer’s algorithm gives you a home offer price based on factors like the improvements you’ve made on your property, how old it is, where it’s located, etc. The real estate company acting as an iBuyer aims to sell your house relatively quickly after you’ve concluded the deal and moved out.
A real estate agent is an individual who represents sellers or buyers of property. Many agents specialize in either commercial or residential properties, while others buy and sell both.
Hiring a real estate agent to list and sell your home is a time-tested method. A real estate agent usually gets paid a percentage of the sale price when you sell your home. 5-6% is typical, though that number can be more or less depending on your situation.
If you’re thinking about selling your home, the advantage of an iBuyer is that you will get an offer almost instantly. All you have to do is plug in your home’s information, and the algorithm will spit out a number.
If speed is of the essence, going the iBuyer route may be a good idea. You won’t have to pay realtor commission fees. You also won’t have to wait for months until you find the right buyer – and for them to get the financing in place.
However, the potential issue with the iBuyer model is that the algorithm might come up with a number that seems wildly off base. After all, these companies want to sell your home and make a profit off of it. They may try to offer you a lot less than you could get in a traditional deal brokered by a real estate agent.
Going through a real estate agent or an iBuyer depends on whether you’re in a hurry to sell your home and whether you’re willing to accept less money than the house is probably worth. The iBuyer model is undeniably convenient, fast, and hassle-free. What the algorithm comes up with as your home’s fair market value, though, might seem off base when you look at what homes recently sold for in your area and consider any improvements that you’ve made over the years.
If you’re not in a rush to sell your property and believe you can get more money for it with a broker showing it to potential buyers, use the old-fashioned method. Even with the agent’s commission fee, you may walk away with more cash than the iBuyer offered.
If you want to make a quick sale and don’t feel like testing the market, an iBuyer might be the more attractive choice.