Hi, I’m Amanda with Amanda Spills the Realty. I’m a REALTOR® with RE/MAX Trinity based in Fort Worth, TX. And today, I’m spilling the tea on iBuyers.
Alright, so you’ve heard of iBuyers. These are companies that will send you a postcard in the mail or reach out to you directly over the phone to buy your home. They boast about the convenience of selling directly to them you don’t have to worry about putting your house on the market. But I’m here to break down the cost of that convenience to you.
Alright, so let’s start at price. When an iBuyer reaches out, they will most often offer you below market value—because how else are they going to make a profit on the home? But when you work with an agent, and especially in today’s market, you’ll likely get above market value.
So as we’re breaking down these costs, we’ll go ahead and include a remaining balance. That’s going to be the same whether you use an iBuyer or not. Um, that’s the balance you have left on your loan. So in this example, we’ll just use $100,000 for easy math.
Alright, so let’s talk about closing costs. Here is where we start to see some discrepancies. Right now, we’re in a seller’s market, so we’re actually seeing buyers offer to pay for things like title policies that have traditionally been paid by sellers. And so, iBuyers are not necessarily offering that because remember, their talking about convenience in their offer. So they’re not doing some of those same negotiation strategies that buyers are doing to compete.
Alright, let’s talk about commission because iBuyers LOVE to advertise that you don’t have to pay a REALTOR® commission. So, in this example, we’ll just use $15,000 as what the commission would be for a listing agent and a buyer agent commission.
SO, by working with an iBuyer, you avoid paying a REALTOR® commission, you are also paying a service fee, which is often the same or sometimes even more than what that REALTOR commission would have been. And so, if you’re thinking about using an iBuyer to try to make a little bit of extra money by not paying REALTOR®commissions, just make sure you take a closer look at that service fee or transaction fee to make sure it’s not the same or it’s not more than if you would’ve hired an agent.
Alright, so let’s talk about repairs. So when you put the house on the market, a buyer may have an option period, they may do an inspection, and they may request some repairs. Some of them may be reasonable, some of them may not. But you have the ability to negotiate. You have the ability to say “no” to those repairs requests, whereas with iBuyers, they will often have mandatory repairs that will come in the form of a non-negotiable credit to them so that those repairs can be taken care of. And those can often add up.
Okay, so holding costs—or, the cost to continue owning your home until it closes may be slightly lower with an iBuyer because they can do a quick closing. But, in this market, it doesn’t mean that you can’t close just as quickly—maybe a little bit longer—with an agent.
So, this brings your grand total to earning $33,946 more dollars if you list with an agent than if you sell to an iBuyer. What could you do with an extra $30,000? I know I can think of a few things.
So, I know it may be tempting when you get a postcard in the mail, and you have a ready and willing buyer right at your fingertips. I get it because I get the postcards, too, and I feel that same twinge of excitement that someone wants to buy my home. But, you’ve gotta think about the long-term difference in what you could actually make when you sell your home.
As your REALTOR® and listing agent, I represent YOU. I’m looking out for YOUR best interests. An iBuyer is just that—the BUYER—they’re looking out for their best interests. And so, when I represent my clients, I want them to get top dollar for their home.
And I like to be transparent from the beginning. Before we even list the home, I like to provide you a seller’s net proceeds lists so that you can accurately predict how much you can actually walk away with at the sale of your home.
Okay, so I know that was a lot of information, so if you’re in the DFW area and are curious about how much you could get for the sale of your home, I’d be happy to meet with you. Feel free to send me an email at amandaspillstherealty@gmail.com. And if you’re outside the DFW area, still feel free to send me an email. I have connections with rockstar agents all over the country and all over the world.
Until then, feel free to subscribe to my channel and follow me everywhere @amandaspillstherealty. See ya’ next time!
