Quick cash offers, no commute, and digital correspondence — no wonder more and more people are turning to iBuyers to sell their property!
But if you’re new to iBuyers or are simply indecisive, choosing a service can be confusing.
What’s the difference between Knock and Offerpad? What’s more affordable — Offerpad or Opendoor? Which service will give me exactly what I need?
There’s aren’t many iBuyers that are perfect for everybody. So for prospective property sellers that want to use an iBuyer, proper research is key.
Which service is right for you? Keep reading to find out.
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Knock
Knock’s Home Swap program focusing on homeowners’ transition from the last home to the next. With the Home Swap program, homeowners can purchase a new home before selling their current one — something that they wouldn’t have been able to do without something like the Home Swap program.
While Knock isn’t ideal for all sellers, they’re great for those who still want shelter while they’re searching for a new home. Knock is uniquely motivated to support and helps sellers transition into their new homes. This makes this program a must for anyone who’s stuck at their current home but wants to move on.
Fees
Knock charges a 1.25% convenience fee for their services, plus a $1,450 processing and underwriting fee. They also charge two commission fees: one to sell your current home, and one for when you purchase a new home. Their Home Swap program also comes with other charges, including charges for repairs.
Keep in mind that unlike other similar services, Knock will also provide financing options for sellers. These financing options include early mortgage approvals, interest-free loans, and more. While they do charge their fees, they also try to help sellers through both the buying/selling process the best they can.
These loans can cover down payments, repair fees, and future mortgage payments. While using Knock doesn’t lower the cost of the new home, it will allow sellers to pay off their debt on their own time.
Cash offer time
Knock doesn’t make cash offers. Their typical offerings include those loans and other financing benefits that sellers can use. But when sellers struggle to sell their home, they can accept Knock’s six-month backup offer, which is 80-85% of the home’s fair market value.
Closing process
Knock does not pay for closing costs, although that’s not conventional practice in real estate practice anyway. No matter what avenue sellers turn to, traditional or not, they’re unlikely to work with anyone that will cover closing costs.
Qualifying homes
Because of its business model, Knock has a keener focus on the seller as opposed to other services. Before approving sellers for their loans, sellers must complete two screening processes.
The first is a pre-qualification screening process that offers an estimate on loan size. The second is a pre-approval screening process where Knock offers the seller their loan.
Knock also looks for a certain kind of seller, such as one that wants to sell and purchase their primary home, as opposed to a vacation or temporary home. The seller must also look for a single-family home, a condo, or a townhome. They must also live in the current service area.
The service also set rules for qualifying homes. To use Knock’s services, sellers’ homes must:
- Not be located in a 55+ community
- Have no water/foundation damage
- Have recent sales data in the home’s surrounding area
- Only have permitted additions
To use Knock, sellers must expect a thorough screening process, for both the sake of the service provider and the seller. This will ensure that Knock’s innovative business model runs into no hiccups, allowing it to shine.
Available markets
One of Knock’s biggest drawbacks is its limited market availability. Their cities are spread across 8 states, with three states containing almost half of those cities. Once Knock expands enough to spread their market more evenly, there’s a better chance for sellers nationwide to use Knock’s unique services.
Opendoor
Plenty of sellers, whether they be property developers or homeowners, are always impressed by Opendoor’s fast and convenient service. With Opendoor, sellers can operate on their own time. They also won’t have to set aside so much time preparing their homes for the market.
In a blink of an eye, sellers will realize the sheer speed of Opendoor’s services. Sellers could even receive an offer on their homes in as little as 24 hours! This speed is impressive and displays Opendoor’s modern and updated take on real estate practices.
Fees
Opendoor doesn’t have a commission fee. But they do have a 3.5-5% service fee, which is calculated from the closing price. They also do not pay for any repair or closing costs, and will charge the seller if they did during their services.
This is a far better average than the typical 6% allotted to a traditional real estate agent. Even better, selling in an open market has many advantages, one of which includes repair costs that aren’t too high.
Cash offer time
With Opendoor, most sellers receive cash offers for homes within 48 hours. Opendoor’s swift service is exactly what has cemented its place on the iBuyer market.
Closing process
After about 14 days, Opendoor will close the deal. Opendoor is also coveted for its flexibility, which allows sellers to choose their own closing dates too.
Qualifying homes
This service usually targets single-family homes, condos, townhomes, and duplexes valuing between $100,000-$600,000. For the most part, Opendoor does not deviate from this standard.
Available markets
Opendoor offers its services to 33 cities. Almost all of these 33 cities are well-populated metropolitan areas. For buyers who want a quick sale in a big city, this is good news.
Offerpad
Offerpad offers an astounding marketing pitch — the ability to close a sale in as few as 10 days. That’s one of the fastest times you’ll ever hear in the residential real estate world. While their services are pricey, some sellers find the convenience worth the price.
So for sellers that have more money than time, Offerpad’s the way to go. Selling a house can be a hassle, but with Offerpad, the sale will happen at high speed.
Fees
Offerpad’s service charges run from 6-10%. There’s also a 1-3% commission charge and other possible repair credits. Just like other services. Offerpad doesn’t pay for closing costs.
This service charge is steep, considering that traditional real estate agents typically receive around 6%. However, this service is for those who view time and the stress of waiting as a bigger issue than money.
Cash Offer Process
They said it themselves — Offerpad promises to deliver a cash offer within 24 hours of a home’s listing. While some harp on this feature’s disadvantages, namely being unable to consider potentially better offers that might’ve otherwise been offered, this option is ideal for those who don’t like the typical hassle of a property sale.
Closing Process
As mentioned before, Offerpad offers to close property deals in as little as 10 days. For some sellers, this is great. But again, for some sellers, this avoids any chance of seeing better offers.
Qualifying Homes
Like other services, this Offerpad looks for single-family homes. Specifically, they look for single-family homes that were not manufactured, pre-fab, or mobile. The homes must also have been built after 1960, value at $500,000-$600,000, and must be on less than one acre of land.
Available markets
Offerpad buys and sells homes in 16 US cities. Like Opendoor, Offerpad focuses on areas with dense populations. That way, they have more chance of reaching sellers and sellers have more iBuyers to consider when selling their home.
Which iBuyer is right for you?
iBuyers are accessible, quick, and usually cheaper to work with than real estate agents. There’s also plenty of different kinds of iBuyers for different kinds of sellers. By taking a look at the difference between Knock vs. Opendoor vs. Offerpad, sellers can understand the specific benefits they’d get from each iBuyer.
At iBuyer.com, we’re full of experts on the iBuyer market. That’s why we offer plenty of education and services for those that need an iBuyer. If that sounds like you, type your home address into our homepage to get your free home value — with us, you can get a head start with your property sale today!
