Selling your home to an iBuyer offers a lot in terms of convenience, but it also comes with certain costs.
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Selling to an iBuyer offers a lot in terms of convenience, but it also comes with certain costs you should consider before deciding to do so.
How does the process work? You go to a site like Opendoor, Offerpad, or Zillow and enter your home’s address (and perhaps submit a few pictures). Then, they come up with an offer for it. If you accept the offer, they’ll send a representative out to your house to do a quick walk-through and make sure everything is in working order. After that, all you have to do is pick the closing date.
In addition to this convenience, many people assume they can skip the closing costs of a normal transaction, but that’s not true.
Offerpad, for example, charges a service fee between 6% and 10%. After they buy your home, you also need to pay all the normal transaction costs that come with selling it, including the buyer’s agent’s commission, concessions to the buyer, holding costs, maintenance fees, and taxes, and other costs to list and market the home.
“If you’re willing to sell for less money and pay more in terms of fees for the sake of convenience, then, by all means, sell to an iBuyer.”
Opendoor charges between 6.5% and 13%—the exact figure varies based on how long they think it’ll take for them to sell the home after they buy it.
Zillow, meanwhile, states the following on their website: “There is no cost to request or receive an offer from Zillow. If you choose to sell your home to Zillow, you will receive a clear statement outlining any fees associated with the offer.” By reading this, it’s safe to assume they charge roughly the same rate as the other two.
The bottom line is this: The fees you’d have to pay when selling through these companies is more than what you’d have to pay when listing the conventional way. If you’re willing to sell for less money and pay more in terms of fees for the sake of convenience, then, by all means, sell to an iBuyer. Otherwise, you’re better off putting your home on the open market.
As always, if you have any questions about this or any other real estate topic, feel free to call or email me. I’d be happy to speak with you.