How Convenience Could Cost You
iBuyer vs Realtor
As technologies continue to evolve and the way business is conducted rapidly changes, the more likely it is that you will hear about selling your home to an iBuyer. If you have not yet heard this term, we are here to give you all of the information on the topic so that you are well-educated should it come up.
In essence, iBuying is another option that sellers have when trying to sell their home. Rather than putting the house on the market, a form is completed through an iBuyer site and the iBuyer will offer you an average market value for your home soon after the application is completed. This is a quick process, which is why the ‘i’ stands for instant.
This sounds like an extremely attractive alternative to putting your house on the market and opening your house up for showings, however, that convenience could actually cost you. iBuyers typically offer below market value for the home, costing the seller equity. In addition, they charge a full commission plus other fees that can add up to as much as 13%.
We will look at the example of a house that would be listed for $350,000.00 when put on the market in the traditional way. This same house would go for just $329,000.00 with an iBuyer who will buy your home for an average of 10% below market value. Your realtor’s commission will then come out of the sale price, and while an iBuyer does not receive commission, they receive service charges where realtors do not, which is greater than the commission of a realtor. Finally, we see that closing costs are paid for regardless of how the home is sold.
A comparison of what you could net.
The total amount of money that you could receive from your home, therefore, is much greater when the home is sold in the traditional sense rather than through an iBuyer. With a realtor, you can net about $45,000.00 when you would net only about $20,000.00 with an iBuyer. That convenience may cost you valuable money when selling your home.
For more information, contact your local Foundation Title representative!