Selling your home can be a daunting task, and even scarier when you hear the words “iBuyer”. Many people aren’t aware of what an iBuyer is, so let’s break it down. An iBuyer uses computer technology to buy and resell homes. They market in a way that sounds very appealing to sellers- “an offer in 24 hours or less” or “save yourself from dealing with the market and sell to us instead” kind of deal. That sounds great, but if it sounds too good to be true, it most likely is.
1. Are they local?
When working with an ibuyer you usually work with an automated algorithm and an individual based many states away. Most ibuyers make cash offers without ever seeing a home and then significantly reduce the offer after an inspection, sometimes as late as the day of closing. When working with a cash buyer, ask if they are local and encourage them to see the property in person before making the offer.
2. Are they the end buyer?
An end buyer is typically an investor or someone who has a plan for your home. You want to know who you’re doing business with and what they plan to do with your selling home! iBuyers typically chew your house up and spit them back out, so to speak. You want to make sure whoever you sell your home to genuinely cares about you and your home. Plus, working with an end buyer usually nets you more money by cutting out the middleman.
3. Have they seen the property?
Has the buyer been out to see the property, or are they looking to purchase sight unseen? This is a key indicator of whether or not the offer will change. Big box companies that spit out a number online usually reduce their offer significantly upon a later inspection. If a company offers to close site unseen, take a good look at the contract to ensure you are protected and will be compensated for the lost time if the deal does not close.
4. Is there an option period?
An option period is a set number of days a buyer has to withdraw their offer and terminate the contract. Oftentimes, a seller would prefer not to have an option period or to have a short one, as the buyer would have less time to back out of their offer. You want your money as quickly as possible, so be sure to look out for those option periods! A lengthy option period is a good clue that the buyer intends to do something other than close on the property themselves.
5. Do they purchase as is?
When you’re selling to an average buyer, they may ask you to change or fix many things in the house. More often than not, an iBuyer will purchase your home in as-is condition. As this sounds great, you must weigh the pros and cons of selling to an iBuyer. There are many other local options who may also be interested in buying your home in as-is condition!
6. Do they require an inspection?
In almost every real estate transaction, an inspection will take place. Is this particular buyer wanting an inspection prior to closing? Or are they waiving their right to an inspection? Either way, most iBuyers will still purchase your home in as-is condition, but may ask for a reduction based on inspection findings.
7. Do they require the home to appraise?
When your home is appraised, it may come back less than the initial offer you received. Many times you may receive an offer contingent on the appraisal. This means, if your home is appraised for less, you may have to accept less. Some iBuyers require the home to appraise at or above what they have offered you for your home.
8. What fees are associated?
Most iBuyers already give you a lowball offer, and then they tack on miscellaneous fees for you to make even less money. When dealing with an iBuyer, be sure to look over the offer very closely and make sure they aren’t adding additional fees. Do your research and read honest reviews from past clients, looking for the mention of unknown fees.
In conclusion, don’t be afraid to ask these important questions when speaking with an iBuyer. Again, if it sounds too good to be true, it probably is! Look to sell your home locally to avoid any misunderstandings and unnecessary fees. Contact Flash Realty Solutions for more info. And always remember that iBuyers are usually only thinking of you as a profit, not a real human.