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An Ibuyer is a company such as Zillow or Opendoor that buys homes directly from homeowners without the use of a real estate agent. What they’re touting is an easy seamless transaction. Some of the benefits of using an Ibuyer are you get an instant offer, you don’t have to deal with showings and you can usually set the date of your closing. So it allows you to help determine when you’re going to move.
All of these things are awesome and you know what, in the right situation I agree going with an Ibuyer might make the most sense, I also think it makes sense when selling something as valuable as your home to look at all the options.
Here’s also some of the negatives that can be associated with Ibuyers. So the way Ibuyers work is they use an algorithm to determine the value of your home much like you see on Zillow with their zestimates feature. And then they make you an offer on the home and you either accept it or reject it there’s no negotiating. So what you lose here is the ability to drive up the price, you can’t get multiple offers and have people go up higher and higher, you get one number and it’s either an accept or reject.
And honestly from what I’ve heard Opendoor for example usually does make you a fair offer, but again I don’t believe it’s the best offer you’re gonna get because there’s no competition, there’s no supply and demand.
The next potential stumbling block is the home inspection. In a traditional home sale the buyer would get a home inspection and then depending on what comes back the seller and buyer would go back and forth and negotiate a resolution. In this situation though Ibuyers get a home inspection and they come to you and basically say here are the problems you can either fix the problems or we’re going to reduce the price of our offer by X amount of dollars.
So again you’re losing that negotiating power, you’re using losing the ability to get the price that you want and deserve. So that’s something to be aware of if you’re gonna go with an Ibuyer.
The final thing to be aware of if you’re using an Ibuyer is finding how much they charge. It’s my understanding that many times they’re charging upwards of 10 percent or more to buy your home so suddenly that fair offer you got doesn’t look so fair when 10 percent is coming right off the top.
And listen all that to say I don’t think Ibuyers are bad, from what I’ve heard Opendoor is in 20 markets and their market share has risen in every single one, that wouldn’t be the case if they were some terrible entity. I just don’t think right now the way they’re set up geuss sellers the most money from your home and I think that’s what most sellers want is the most money, especially if they’re losing tens of thousands of dollars.
Read More: Zillow Stops Their Home Buying Program