By Caroline Abkar, REALTOR | October 8th, 2019
You may have heard the news and seen their ads everywhere. What an iBuyer is, is a company that will offer to buy your property very quickly, all cash, with an online offer, sight unseen. Think Zillow Offers, Redfin Now, Offerpad, Opendoor. These are all iBuyers.
Now why do they do this? Why do iBuyers offer to buy your home sight unseen, all cash? Well, it’s because their model is based on providing you as a seller all the convenience, compared to the traditional models. That way, you can sell very quickly and they claim that it’s almost hassle-free. There is a risk with this model that they need to bear and account for. iBuyers are volume based companies, buying a lot of homes and they’re buying them all cash, but they’re also making their profit up front. They’re not making the profit when they resell the house later on with a markup. Making a profit up-front at the time they purchase the home means that for you as a seller will be netting much less for your home compared to the traditional model. Research shows that we’re talking up to 15% less.
So if you’re a seller who desperately needs the cash, you’re moving out of state, out of country, you absolutely need to move and you cannot wait the 30-45 days or however long it may take on the open market, then you may really be considering an iBuyer’s offer. But again, you need to understand that that convenience absolutely comes at a cost. Take this example provided by Fidelity Title:
What this shows is that the net difference between using a Realtor in a traditional open market model vs an iBuyer is $93,217 for a home that it worth $680,000. That is how much less you walk away with as a seller in exchange for a quick close. Therefore, it’s very important to understand the cost of that convenience and remember as well that if what you’re looking for is a quick all cash offer, a good established Realtor will have partnerships with local investors who will offer all cash and no contingencies for your home as well to make it hassle free. So don’t forget that option, and make sure that you’re doing your homework and you’re thinking of all the possible scenarios in order to make the best decision for yourself when the time comes to sell your home.
About the author: Caroline Abkar is an established San Diego Realtor and Bay Park resident who is absolutely passionate about the community as well as representing her clients in selling and acquiring the biggest investment of their lives. She will go above and beyond for those who place their trust in her. You can contact her anytime at 619-808-4804.