iBuyer Programs: What You Should Know

Posted by Kelly Holck on Friday, June 14th, 2019 at 10:30am.

iBuyer programs are on the rise. Before you commit, here are some things you should know about how they work.

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Quite a few of our clients have asked us recently what the deal is with iBuyers. Therefore, I thought it would be important to address the topic today. iBuyers are basically companies that will give you an instant cash offer on your house in order for you to close in just days  if that’s what you need . Zillow and Homelight have both seen some success with this. 

Now the question comes: is selling your home with an iBuyer a good idea? Honestly, it depends on your situation. People who sell their houses with an iBuyer typically end up selling for at least 10% less than they could on the open market, according to Forbes.com. By opening your house up to the entire market, you will be able to create more demand which should in turn, give you more buyers.

An iBuyer definitely fills a great niche for people who need to sell quickly, but you shouldn't expect to get top dollar through this method. Based on my own research, these companies make an offer on your house and then deduct a fee of 6% to 8% off of the price. Ultimately, they’re going to wind up remarketing and selling your home or repurposing it as a rental.

Another frequent complaint I’ve seen about iBuyers is that when they find anything wrong with the home during their final walk-through, they can add even more deductions on.

When you hire a Realtor to sell your home, your commission will be around 6% and you'll have to prepare your home a bit, but it's also much more likely to sell for top dollar.

Zillow’s instant offer program isn't in the Madison market yet. However, of those who have received an instant offer from the Zillow program, 90% end up selling their home in the traditional way, through a Realtor.

Is there a place for iBuyers in our market?

Of course. The advantages do outweigh the disadvantages for some  homeowners out there. However, if you're hoping to have someone who will negotiate for you and you want top dollar for your home, this isn't the way to go. 

If you have any questions about iBuyers, your home’s value, or anything else related to real estate, don’t hesitate to give me a call, 608.729.7351, fill out the form below, or send me an email at shawnkriewaldt@kw.com. I look forward to hearing from you!

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