If you’ve turned on the radio, opened a web browser, or driven past billboards in any major city, chances are you’ve encountered advertisements for companies such as Opendoor, Offerpad, Redfin Now and Zillow Offers. All of them are examples of “iBuyers” - companies who will buy your home sight unseen purportedly in the name of convenience to the seller. Selling to an iBuyer means that you can skip most of the time-consuming elements of the traditional home-sale process - listing, showing, marketing, etc. - and receive an offer on your home within days or even minutes based on a proprietary valuation model.
Taking advantage of this new real-estate trend may be right for you as a seller if you need to sell quickly. Maybe you’re relocating and just don’t have the time to put into selling your home through a realtor. Maybe the uncertainty of having your home languishing on the market causes anxiety. Whatever the case, this new convenience isn’t cheap, and you’ll have to weigh how much a “quick and easy” process matters to you against the actual value of your home.
A seller considering an iBuyer should first know with whom they’re making the transaction. On the other side of the screen is an investor, sometimes another individual but usually a company, and those investors are counting on making a profit. In exchange for fast and furious instant liquidity, iBuyers will charge a full commission with a built-in 5% - 10% fair value discount on the price of your home. Assuming the value of your home remains the same as when you purchased it, you’re already losing money - especially if, like most people, you purchased your home with a mortgage.
Let’s say you purchased your home for $400,000 with 20% down ($80,000), and an iBuyer offers you $380,000 for it. Not only will you have automatically lost $20,000 on the value of your home, you’ll also pay an additional $22,800 (6%) commission. With a combined loss of $42,800, that’s over half of the equity you put into your home. Is the convenience worth the price? You’ll have to decide that for yourself, but according to Zillow, 90% of potential sellers reject instant offers from their iBuying platform and opt for a traditional realtor instead.
Until the overall cost of instant “iOffers” decreases, working with an experienced sales agent with intimate knowledge of the local market continues to be in the best interest of the seller. Selling on the open market using our proven system results in higher average home sale prices and lower transaction costs. The process is not instant and, of course, nothing in life is guaranteed, but we here at Housed don’t just care about our bottom line at the expense of consumers - we want sellers to walk away with the highest price possible, too.
About Stephen Crawford, Realtor
Stephen is a Dallas area native; growing up in Richardson and graduating from the University of North Texas. Stephen has an extensive background in kinesiology, sports training, and rehabilitation along with a lengthy history of competitive sports including football, wrestling, and a multitude of endurance and ultra-endurance events. Stephen puts these endurance skills and abilities to use daily as a Realtor and advocate for his real estate clients. He takes great pride in the long lasting relationships he builds with clients and he never wavers in his relentless pursuit of helping them achieve their goals; guiding them through home buying and home selling processes and keeping their best interests at the forefront of all transactions and interactions. Stephen is a devoted father to two beautiful daughters and is impassioned by being engaged civically and serving others in his community. In his free time he enjoys being active in many Dallas area charitable organizations, most notably Bonton Farms, an organization devoted to providing locally grown food at affordable prices in impoverished Dallas communities.
For more information about the selling or buying a home in the Dallas Metroplex, contact Stephen Crawford with Housed Real Estate + Relocation at 972.896.8496 or SCrawford@HousedRealEstate.com.