What is an iBuyer and The Pros and Cons of Selling Your Home to One

Ready to part ways with your home? Before you dive into a real estate transaction, make sure you're aware of the three main options available: an experienced agent, FSBO approach or take advantage of iBuyer services. Each comes with its own pros and cons - so consider which route best meets your needs for the sale of your property.

If the last option has never crossed your mind before, chances are you have a long list of questions regarding what iBuyers are, how they work, and how they differ from the first two options, which are part of the traditional home sale process.

Don't worry. While we may not have all the answers for you, here we discuss the basics about iBuyers, and the pros and cons you should greatly consider before choosing this kind of transaction.

An iBuyer, which is short for “instant buyer,” is a real estate company that buys and sells homes through technology. Instant refers to the speed at which an iBuyer's algorithm calculates the AVM to make an offer on a home, which could take only minutes or days sight unseen.

Selling your home doesn't have to be an overwhelming process. With iBuyers, you can quickly and easily request a bid for your property with just the basics: address, age of the building, square footage and any distinguishing features. Upon receiving this information, these companies will evaluate it to provide you with their offer. Afterwards, they'll conduct a more in-depth assessment of the house before confirming their final offer to you.

When considering this option, it’s important to understand the advantages and disadvantages so you can determine if it’s best to use their service in your particular situation.

PROS

Selling your home to an iBuyer offers the promise of a unique, streamlined experience from start to finish. From avoiding costly repairs and upgrades for staging or increasing curb appeal, you can skip all showings that come with traditional sales! It's no wonder why more sellers are choosing this speedy option when it comes time to move on.

Likewise, iBuyers offer quick and flexible closing dates. You have the ability to close at your convenience or when it works best for you, meaning, you can close as quickly as 10 days, or as long as 90 days. 

Selling to an iBuyer may be the best route to take when:

• You're relocating to a new city and need to sell your current home quickly.

• You’ve recently inherited a property and don’t want to maintain it or turn it into a rental. 

• If you have an investment property and you’re struggling to find a new tenant.

• You need to tap into your home’s equity fast to help with your financial situation.

One of the biggest benefits of using an iBuyer is the assurance of an all-cash offer for your home. You don't have to worry about a buyer’s financing falling through. It’s also a huge help if you need the money as a down payment to purchase your next home.

When you choose the iBuyer route, there's a guarantee that your home will sell one way or another once they’ve given a final offer.

CONS

Selling your home for all cash isn't just a shortcut, it comes with added risk. As such you may receive an offer that is lower than the estimated market value of your property - but in exchange for this and other advantages like faster closings, convenience and flexibility can make up what might be lost from original offers.

Likewise, if you’re in a hurry to move and can’t do the repairs yourself, the costs will be deducted from the price since the iBuyer will be the one to handle the repairs. This could take a huge bite out of your offer.

Despite their steady upward trajectory, iBuyers are not yet present in all housing markets. Before deciding whether this is your best option for selling a home, it's important to consider the specifics of your local market and determine if they're available where you reside.

iBuyers focus on purchasing homes that are already in great shape and need only minimal upgrades. However, the criteria for selection is often rather stringent so even higher-end properties with custom features or older residences may not qualify.

When considering an iBuyer, it is important to bear in mind that meeting the company's requirements for purchase does not guarantee a sale. Inability of your property to meet their criteria can prevent you from utilizing this service.

When it comes to selling your home, you may want more than just the convenience of an iBuyer; often times people seek a connection with their potential buyers. If connecting on a personal level and knowing who will be moving into your space matters to you, then going through traditional channels – such as using a real estate agent – is likely the ideal route for you.

When you're looking to make a move, working with an iBuyer is one way of simplifying the process and saving on some costs. While it may be convenient for many homeowners out there, it's also important to consider potential risks associated with this approach.

Among the most popular iBuyer companies are Opendoor, Offerpad, and RedfinNow. Zillow once had an iBuying business called Zillow Offers, but it closed down in 2021.

Choosing a real estate agent who is an expert is a smart way to make a better and more informed decision. We at Santa Sells Houses are always ready to help you through the process of buying or selling a home. Contact us at (519) 914-2679 or email us at info@santasellshouses.com.