ibuyers – With the market being so robust, ibuyers have returned and are eager to purchase homes. What is an ibuyer? It is a company/ entity that buys houses directly from a homeowner for any number of reasons. They may want to keep it as part of a Real Estate Investment Trust and rent it out. They may turn it over immediately in the hopes of making a profit. They may even be working in conjunction with a Homebuilder, for the benefit of both the ibuyer and Homebuilder. It is this later scenario that I will focus on in this update.
The convenience offered is a “guaranteed” purchase of your existing home without having to put it on the open market. Along with that, the convenience of not having to do any repairs, as the ibuyer will inspect your home and take the deductions for what they find upfront, reducing the purchase price but eliminating the traditional “wait until after inspection” jitters that exist in normal markets.
These conveniences can certainly have value. As always though, you need to have someone looking out for you. The “guaranteed” purchase does have exceptions. For example, the promise of letting you stay in your current home, until your new home is complete, comes with risk. It is not unusual for the ibuyers to have an opt out up to 10 days before the new home closing, to cancel the purchase and get any deposit they made with you back. Guess what happened during the pandemic? Some ibuyers made use of that very clause and homeowners were forced to start from scratch or give up on their dream of buying that new home. Some also retain significant money from your sale proceeds; so when they reevaluate your home at possession, they can keep all, or a portion of that money; if they find the home is not acceptable to them, in their opinion. You also end up paying some fees that are currently very negotiable, such as HOA transfer fees, that can add up to hundreds of dollars. You are also giving up the opportunity to see what your house will bring on the open market. The lure there is that you will save on commission. When I have run the numbers, based on an ibuyer’s original offer, it has been far more advantageous to put the house on the open market. We are in the best seller’s market in decades or maybe ever.
So, what is the best for you? Review all your options and have someone in your corner that will help you do that thoroughly. Just like I can help you purchase a New Construction from a Homebuilder, I can help you sell to an ibuyer. I can use my market expertise to make the ibuyer compete with the price you would get on the open market. Their initial offer is not always their final, best price. I can negotiate on your behalf to get you that best price. The market analysis I do works just as well for negotiating with them. They pay me a referral fee and you get the convenience of no showings etc. Plus, you make sure you have reviewed all selling options, so you do not end up losing out on any money.
Bottom line - Contact me before you get online for that ibuyer quote of how much they will pay for your house.