Companies like OpenDoor, OfferPad, Redfin Now and Zillow Instant Offers are online real estate investment companies, commonly referred to as “iBuyers.” They’re hailed for taking the guesswork out of buying and selling homes, because they provide clients with quick offers at a seemingly fair market price.
The reality is those companies are NOT who you want to work with. iBuyers can’t replace real estate professionals for a number of reasons.
For one, sellers could get more for their home. iBuyers’ offers derive from an imprecise algorithm, meaning sellers aren’t getting the most for their home. These algorithms may gather data from the local and nationwide markets, but they do not even come close to the nuance that an experienced real estate agent brings to the table. “Real estate professionals are able to use more than just [algorithms] to spit out an offer price for a home. Agents have market knowledge, access to comps, and years of experience to help them when guiding a seller to selecting a list price.” iBuyers will never be able to match the precision and negotiation tactics of real estate agents.
Two, iBuyer customers pay a premium for the service—7% on average compared to the 6% that TBT charges. That might not seem like a huge difference, but when you consider that a real estate agent often sells a home at a higher price than the iBuyers’ algorithms suggest, the seller is going home with a bigger check in the end. For instance, a seller may decide to sell their home to Redfin Now for $300,000, and pay out $21,000 to Redfin. If that same seller had worked with a trained real estate professional, he could have sold his home for $305,000, and paid out only $18,300. That’s a $2,700 difference! In addition to the high commission cost, iBuyers charge even more in “experience fees” and the like, meaning you could be paying closer to 10% instead of 7%.
Three, iBuyers are impersonal and do not free the seller from responsibilities such as preparing the home for sale, advising repairs, and recommending trusted local vendors to perform inspections, financing, and the like. Sellers will have to cover all those costs themselves, or spend valuable time pricing out different vendors to have the work done for them. Some sellers may choose to deduct the cost of repairs from the offer made by the iBuyer, but this can backfire when you’re charged $80 to change a lightbulb. One of TBT’s greatest assets is its contact sphere, and we can painlessly connect you with the best vendor for your wallet and our standards of quality.
The facts don’t lie. When 90% of sellers reject iBuyers’ offers in favor of working with a real estate agent, the choice of where and how to sell your home becomes extremely clear. Skip the hassle of working with iBuyers. Partner with TBT to make sure you’re receiving the level of service you deserve, and the intimate knowledge of the local market that a sterile algorithm just can’t match.