Real Estate Watch – Cynthia Elizondo
Today’s home sellers have several different options when it comes to how they want to sell their home. They have the tried and true option of contacting a Realtor, who will do an assessment of the value of the home, help to prepare it for showings, put it on the MLS and other real estate sites, market it, and negotiate the sale and transaction. For those sellers that are confident in their ability to sell the home themselves, they can do a For Sale By Owner. If the seller prefers to avoid all the hassle, and doesn’t need top dollar, they can contact investors or flippers. These are all valid options, depending on the goals of the seller.
There is a new option on the horizon, however, that may sound great to many, but may have pitfalls that are not obvious at first glance. This is the new concept of the “iBuyer” or “instant home-selling solutions” offered by companies such as Opendoor, Offerpad, and even Zillow. The way this strategy works is by offering to purchase a home, virtually sight-unseen, without the hassles of showings, juggling offers, or the fear of falling out of escrow. Furthermore, these businesses make their offers sound even more appealing, since the sellers “pay no commissions.”
Unfortunately, these companies are not being honest in their marketing. Although there are no commissions, the fees assessed by the iBuyer companies are significantly higher than standard commission amounts, and studies are showing that the sellers are netting significantly less than they would by the traditional method of selling with a Realtor. According to research from real estate data firm Collateral Analytics, iBuyers cost home sellers about 13-15% of a home’s sale price, compared to 5-7% of the costs associated with a traditional sale. Similarly, a study by MarketWatch showed the iBuyer sales netted owners 11% less than if they’d sold on the open market!
If you are a home seller looking to sell fast and get out, and maximizing your net proceeds is not important to you, this may be a good option for you. However, if you have a little more time to sell, you could be saving yourself tens of thousands of dollars in lost proceeds simply by considering all your options.
Bottom line, do your research. Don’t sell to the first entity that offers to buy your property. Call a Realtor and find out what your home is really worth. Then, weigh your options and make a fully informed decision.
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Halcyon Real Estate Services