There are a multitude of companies across the Internet, referred to as iBuyers, who are suggesting that sellers can save the hassle of putting their home on the market, showings, repairs, open houses and other things by accepting their instant offer to purchase.
The adage goes “if it sounds too good to be true, it probably is.” The price to be paid for the convenience of not having to deal with the hassle is a lower net sales price than you’d probably realize if you took a more conventional approach to selling your home.
These companies are not charities and therefore, will need to make a profit. The offer you receive is based on an automated value model that takes public information about your home and the market to arrive at a price. Since the “buyer” of your home will then become a seller, the costs for the commission, repairs, selling expenses, holding costs and other things will have to be considered in the price you’ll be offered.
For the company to take on the risk associated with owning an asset of that size, they will have to anticipate expenses that may not actually be incurred. Some of these companies may even factor in a profit also.
There may be situations when an iBuyer or instant buyer would be worth it due to the circumstances. However, if a seller wants to maximize the equity out of their home, it may not give them the proceeds they want, need and/or deserve.
At the very least, you should meet with a local real estate professional who can evaluate your home personally to consider things that automated value models do not. This pro can also estimate what a reasonable sales price could be, how long it may take to sell and what marketing efforts would be needed.
An owner who has made an investment in the home for years along with the risk and responsibility of ownership, deserves to maximize the proceeds they can receive.
