We live in a fast paced society, and every day there is an announcement for anew being online program designed to give us instant gratification and hopefully make our lives easier. We no longer want to drive to a store and even buy groceries-we want to log online, make our selections and have everything delivered to our doorstep, even at a higher price. We pay for convenience.
However, is this the right way to sell a house? I grew up to believe that a home is the largest purchase we make in our lifetimes, and they should be long term investments. IBuyer programs offer a quick and easy solution to sell homes with guaranteed cash offers to prospective homesellers, but at what cost? Compass and Opendoor just received $400 million a piece to expand their IBuyer practice and Keller Williams, Quicken Homes, and even Zillow have jumped on the band wagon.
I relate these programs to the car owner that changes their car out to a new car every 2-3 years, knowing that they won’t make any money on the car, but they will get that shiny new car and not ever have to deal with major repairs. Perhaps todays seller only wants to move on to the next best thing quickly with little hassle, but I advise every homeowner to carefully consider their options before choosing to sell to an IBuyer.
The IBuyer today is similar to “We Buy Ugly Houses”. These programs will take the house off your hands quickly with no hassle-you don’t need to paint, clean, stage, -de-clutter, or re-arrange your schedule to allow for showings. Big advantage, right? Based on my research, these IBuyer programs charge on average 6.5% to sell your home, and they pay the homeseller less than market value! You are basically selling your home to an investor who plans to do the clean up and repairs you did not want to do, then sell your home for a higher price. The total loss on your home through this program could be 10-30%.
Today, the IBuyer program may only appeal to less than 10% of the population, but as more homesellers jump on the band wagon, this will lead to lower comps in the market and lower overall home equity. Tell your neighbors to be careful when approached with these type of programs, because selling your home through this program could drive prices down in your community.
Selling a home was never meant to be quick and easy-it should be strategically planned and marketed properly to maximize the return on your investment. Seller Beware!