iBuyers: are they worth the convenience?

Instant homebuyer companies, also known as iBuyers, are tech companies that buy homes directly from sellers online and then put them back on the market. Without even visiting your home, iBuyers will make you an instant cash offer using a proprietary valuation model. If you accept the offer, you can close the sale in a few days.

While the appeal of selling your house to an iBuyer is understandable, the instant bids they offer may not be worth the associated convenience.

Keep in mind that though iBuyers claim to offer the full value of your home, the bids they make are typically below fair market value (in case they can’t resell the property at the full price). They also charge a fee for conducting the transaction, which is often higher than the standard brokerage fee.

Additionally, the bids iBuyers make on homes are generally lower than what the seller would get from working with a real estate agent. Experienced agents often get as much as 125 percent of a home’s fair market value.

What’s more, these companies strategically appeal to sellers who are in distress. They target people who’ve been unable to sell their homes or have expired listings. Those who are divorcing, in bankruptcy or have homes in foreclosure are also easy marks. Because the sellers are in difficult situations, they’re more likely to accept lowball offers.

Though selling your home to an iBuyer may seem like a good idea, you’ll gain far more from working with an experienced listing agent. A skilled realtor can help you sell your home at, or above, the property’s fair market value.