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iBuyer versus Realtor: Which is better for you?

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ibuyer vs realtor

As iBuying gains traction across the US, the debate of iBuyer versus real estate legend (aka the realtor) intensifies. Both iBuyers and realtors assist in the sale of homes, but despite the common ground, their methods, requirements, ​home valuations​, timelines, and fees are very different.

Let’s begin the realtor versus iBuyer debate by first clarifying each of their roles in the real estate industry.

How realtors work

Real estate agents, also known as realtors, are the traditional real estate legends and are still the most common approach to selling a home today.

Realtors act as facilitators in the sale process, working with their clients—the sellers—to assess the home’s value, list the home for sale, ensure that the home is repaired, updated, cleaned, prepared and staged, and oversee showings and open houses.

Once an offer is made on the home, the realtor presents the offer to the seller and negotiates on their behalf throughout the purchase process.

How iBuyers work

iBuyers, or instant buyers, are the new kids on the real estate block and are quickly gaining popularity because the iBuying model enables sellers to sell their homes fast—for cash.

The iBuyer process is direct and largely automated, offering sellers an instant cash offer on their home, sight unseen. iBuyers will view the location of the home and, using algorithms and neighborhood real estate transaction data, determine what the home is worth. They will then make a cash offer to the seller, usually within 24 hours. The seller can then choose whether or not to accept the offer and also decide on their preferred closing date.

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Because iBuyers make instant offers, there is no need for the seller to hassle with any repairs, upgrades, cleaning, staging, showings, or open houses—iBuyers do any necessary upgrades after the close of the sale as part of their fix-it and re-list it process.

An overview of realtors versus iBuyers roles in home sales

ibuyers vs realtors

In a nutshell, realtors help to facilitate the sale of homes (and traditionally do so with stagings, showings, and an MLS listing), while iBuyers offer cash for homes, typically within 24 hours, sight unseen.

Both the realtor and iBuyer method have their advantages and disadvantages; it really comes down to what makes the most sense for the seller.

To expand on the pros and cons of selling to an iBuyer versus selling with the help of a real estate agent, let’s examine both options in detail.

The pros and cons of a realtor sale

realtor house sale

Traditional home selling with the help of a realtor, first requires a good realtor. Finding a good realtor typically involves Googling, asking around, reading reviews, and interviewing several candidates before finding a realtor that’s a good fit, and demonstrates an understanding of the neighborhood. This takes time, but is an important step.

The chosen realtor will then need to visit the home and assess it in detail in order to provide an approximate valuation, based on age and condition of the home, as well as nearby sales comparison data. Once the seller agrees to a listing price, the realtor will list the home for sale on the MLS system.

To encourage offers, upgrades to the home are typically recommended, including: home repairs, cleaning, and staging. Home showings and open houses are also a standard part of selling a home the traditional way, so sellers have to prepare their home accordingly, and make it available for showings as long as it takes to receive a purchase offer.

Once an offer is received, there are various steps involved before the home is actually sold, including contingencies, such as the appraisal and loan approval. If the appraisal values the home at less than the listing price, or the buyer is relying on a mortgage loan, the offer is at risk of falling through. The closing date is also arranged by the buyer, not the seller, and ​traditional home sale closings take an average of 47 days​, according to Ellie Mae data.

Because the steps involved in a realtor sale are numerous, a sale can take several months. According to data from Realtor.com, the national average this time last year was ​58 days on the market​.

That said, with the right realtor, the sale experience can be a very personalized and pleasant one, not to mention the higher profits the realtor sale process typically offers sellers. A study by Collateral Analytics found that on average ​sellers pay between 13% and 15% less in fees​ when selling their home via a traditional realtor. However, the profits can sometimes be offset by the length of time a home sits on the market.

To summarize the pros and cons of a realtor sale:

Advantages of a realtor sale

  • Lower Fees​—less expense for the seller when it comes to fees and commissions.
  • Profit Potential​—if the home needs minimal repairs and upgrades, and sells quickly, selling by way of the traditional realtor method is often more profitable for the seller.

Disadvantages of a realtor sale

  • Repairs and Upgrades​—seller responsible for all necessary repairs and upgrades.
  • Showings and Open Houses​—seller responsible for cleaning, staging, and preparing the home for showings and open houses.
  • Days on the Market​—listing could sit on the market for months without an offer.
  • Closing Date​—determined by the buyer, not the seller.
  • Contingency Risks​—appraisals that come in less than the listing price and offers relying on a mortgage loan could result in the sale falling through.
  • Days to Close​—typically ​3x longer wait to close than selling to an iBuyer​.

The pros and cons of an iBuyer sale

ibuyer home sale benefits

Unlike the traditional sale process, selling to an iBuyer can be done without a realtor.

Sellers can simply use the iBuyer.com ​home valuation tool​, known as iValuation, and find out what iBuyers would likely pay for their home. iBuyer home valuation is calculated automatically based on big data and does not require a walk-through of the home. In fact, most iBuyers purchase homes sight unseen.

Because the iBuying model involves purchasing homes that are likely to resell quickly, the seller is not responsible for any repairs or upgrades—iBuyers handle all of this post-sale, before relisting the house for resale. But to qualify for this option, the seller’s home must ​meet iBuyer criteria​, including home location, condition, age, property type, and price range.

If the seller chooses to request an instant offer, they can do so immediately online and, iBuyers will likely present a cash offer within 24 hours. This means no listing—​meaning zero days on the market​—no showings, and no open houses.

The seller can then choose to accept or decline the offer. If the seller accepts the offer, they can then also choose their preferred closing date, making it very convenient for anyone moving and wanting to avoid an overlap in mortgage payments. When selling to an iBuyer, ​the sale can close in as little as 14 days​.

In addition, because iBuyers pay cash for homes, the risk of an undervalued appraisal or a mortgage loan falling through, or complicating a closing, is simply not a factor—​eliminating the financial contingencies of the sale.

Many iBuyers also now offer a trade-in option, making it easier to buy and sell at the same time. Realtor.com explains ​how iBuyer trade-ins work​: iBuyers “make ​an all-cash offer on a new home you want. If the offer is accepted, you move into your new home, and the iBuyer works on selling your old house. Once it sells, it settles any costs incurred prepping your old home for sale, and then transfers your new house to your name.”

But the convenience of selling to an iBuyer comes at a price: iBuyers charge ​service fees between 6% and 10%​ in addition to transaction fees. When you compare the profit a seller is likely to receive for the sale, based on sale price and fees alone, a realtor sale makes more sense than selling to an iBuyer. However, that’s assuming there is little cost involved in upgrading the home and preparing it for showings, and that the home sells quickly enough to avoid the seller paying duplicate mortgage payments after moving into a new home.

To summarize the pros and cons of a realtor sale:

Advantages of an iBuyer sale

  •  Speed​—iBuyers offer cash for homes fast, typically within 24 hours.
  • Convenience​—no repairs, upgrades, staging, showings, or open houses.
  • Flexibility​—the seller chooses the closing date to accommodate their schedule and move date.
  • No Financial or Appraisal Contingencies​—because iBuyers pay cash for homes, there is no risk of a mortgage loan or appraisal delaying or preventing the sale.
  • Trade-In Options​—seamless buy and sell process enabling sellers to move without financial constraints.

Disadvantages of an iBuyer sale

  • Potential Profit​—selling to an iBuyer incurs higher fees in return for the fast, guaranteed sale however, the quick close and lack of repairs, upgrades, and staging costs could offset the profit difference.
  • Availability​—while ​iBuyers are quickly gaining ground​, they are not yet present everywhere in the nation.
  • Eligibility​—the iBuying model relies on quick resale, so iBuyers only make cash offers on homes they feel will be able to be sold quickly, for a profit.

Realtors and iBuyers are starting to work together

realtor and ibuyers working together

Real estate firms are now partnering with iBuyers to create a hybrid model and offer sellers the best of both worlds. Keller Offers​, the partnership between real estate giant, Keller Williams, and national iBuyer, Zillow Offers, is one such example.

Some real estate firms are now certifying realtors on iBuying. This is enabling realtors to propose selling to an iBuyer when it makes sense for a client to do so. In a Forbes article on whether selling to an iBuyer is worth it, the times it makes sense for a client include: “if you need to move to relocate for a job, you are a distressed seller or you have found your next home and want to act quickly.”


In summary, the debate of iBuyer versus realtor is likely to continue as iBuying continues to gain traction across our nation. 

Both iBuyers and realtors can help sell homes, but their methods, requirements, home valuations, timelines, and fees differ. Each has advantages and disadvantages, and in the end it comes down to a personal decision that depends on each seller’s unique situation. 

That said, it’s no longer always a matter of iBuyer versus real estate legend (realtor), because iBuyers and realtors are now also starting to work together.

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