According to The National Association of Realtors, 5.34 million homes were sold in 2019. After a sharp decline in sales in the first half of 2020 due to the COVID-19 pandemic, home sales have risen above the yearly average for three consecutive months as of August 2020. The housing market is thriving in the United States making now a good time to sell your home.
If you want or need to sell your home quickly and easily using an iBuyer is your best option, but what is an iBuyer, and how does the process work? We are glad you asked. Only through an iBuyer can you sell your house without a real estate agent, expensive property appraisals, or open houses. Read on to learn how you too can sell your home to an iBuyer and get cash offers for your home in as little as 24 hours.
What is an iBuyer?
The “i” in iBuyer stands for “instant” so an iBuyer is an instant buyer. Homeowners that sell to an iBuyer bypass much of the hassle of selling their home by selling directly to the buyer at a discount and cutting out the middle man (real estate agent). Many iBuyers are actually investment companies backed by venture capital, but everyday consumers looking for the same easy transaction are also iBuyers.
iBuyer vs house flipper
Real estate investors that buy run-down properties, make extensive renovations, and sell the property at a profit are house flippers. This investment strategy is largely different then most iBuyers’ real estate investment strategies. Most iBuyers look to buy properties that are in good to great condition and they pay close to “fair market value” for your home.
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In exchange for a more convenient transaction, homeowners sell there home at a reasonable but discounted price. The iBuyer makes money on the investment by selling the property, normally as is or with minor improvements, at a marginal profit. The iBuyer investment strategy involves making many small profits in many homes instead of large profits in a few homes.
Properties that attract offers
When registering with iBuyer networks and platforms, the iBuyer submits certain criteria for properties they would like to buy. Your listing will get the most offers if the fall into these highly desirable iBuyer properties. The average iBuyer is looking to buy properties that have:
- an automated valuation model (AVM) valuation of $200,000 – $500,000
- built after a certain year (varies widely with newer homes more attractive)
- in good condition needing little to no repairs
- located in a desirable and popular location with high demand
If your home fits the above description then it is likely that multiple iBuyers will make an offer. More offers mean a better chance of getting top dollar for your home. Unfortunately, iBuyers are not available in all states and areas in the USA. Click here to check if your home is located in one of the iBuyer marketplaces.
IMPORTANT: Don’t take the above model as set in stone. If your property doesn’t fit it doesn’t mean you will never get an offer. The only guarantee you will not get an instant cash offer for your home is if you don’t list it. There is no fee or obligation to sell so there is nothing to lose by listing your property to see what offers if any you get.
Why use an iBuyer?
Selling to an iBuyer is all about convenience for the seller and the buyer. Let’s face it, selling a house through traditional means, i.e. a real estate agency, is a huge time-consuming hassle. The need for faster more convenient real estate transactions in the age of instant and immediate result oriented market demands gave birth to iBuying.
Here are a few reasons home sellers choose to sell to iBuyers:
- relocating and need cash fast for the move
- death in the family
- divorce
- bought a new home while still obligated to the first home mortgage
- quick cash from a short term investment
- want to buy a new home and need cash for the down payment
More cash buyers
The increasing competitiveness of the direct-buy market is good news for today’s home seller. Take a look at any millionaire/billionaires investment portfolio and you are almost guaranteed to find real estate. Real Estate investors and companies deal in discount cash transactions to keep profit margins as high as possible.
Streamlined transactions
Both the seller and the buyer want the sale of the property to go as quickly and smoothly as possible. Since the iBuyer platform makes its money from a percentage of the sale (standard five to eight percent) and their sole responsibility to both parties is to make the introduction and broker the deal, deals close in a matter of days instead of weeks or even months with real estate agencies.
Control when you move out
Selling your home and moving on can be really tricky if you have closing delays or have your home on the market for extended periods of time. It takes time and preparation to move so sometimes the seller isn’t ready when the buyer wants to move in. Sometimes the opposite is true and the deal lags on while the property is empty and the owner has to pay the expense of the property and their new home as well.
This problem is somewhat less of an issue with iBuying because when you list your property you can request a move-out date. The iBuyer is usually flexible when it comes to move-out dates if they are given upfront and they are able to prepare the investment accordingly.
What is the process for selling my home to an iBuyer?
Now that we know what an iBuyer is and what the advantages are to selling on iBuyer markets, let’s take a look at how houses sell to iBuyers. The whole process is inherently simple but “instant” is a bit of an exaggeration. Even iBuyer companies take about a week to complete the process. However, most of the time-consuming work is the responsibility of the iBuyer’s platform and the buyer.
Registration of seller
The first order of business is to register with an iBuyer platform that will connect you and your home with iBuyers. We have a simple free sign-up process that takes no time at all. Simply give us your name and email, you will receive an email from us shortly after confirming your registration.
Get an instant valuation
All we need to get an iValuation is entering your address and pressing the “Get My Free Home Value” button. Enter your contact details and email. Our system and the proprietary algorithm then goes right to work calculating and predicting the range of offers for your home based on national iBuyers transaction history. Moments later you will be looking at the registered public information about your property and a google street view image of it.
List property with details
Properties that are represented well with many photos usually receive larger offers from iBuyers. Take the time to take and post clear high-resolution mages of your property that represent the best of your property. You may add up to six photos to your listing.
Some property details such as square feet, number of bedrooms/baths, as well as the year built may already be included in the property details. If any property details are missing or incorrect please select edit info and fill out or make corrections. It is extremely important that you provide accurate, honest, and complete details of the property to ensure you get the highest offers possible.
Receive and consider offers
Once you have completed the listing with details and photos, your work – done. Our team will immediately go to work matching you with top national and local iBuying companies looking to buy properties like yours in the area. Sit back and wait to hear from us in your inbox.
When an iBuyer makes an offer we will send you the offer for your consideration. If you are interested in going forward the closing process takes around one week, or slightly longer depending on several factors, mostly on the buyer’s end. The offer might have some contingencies attached such as an onsite inspection.
Closing delays
Remember iBuyer’s are generally looking for properties in good condition that are ready for resale immediately. If the property needs work the iBuyer may require any repairs be completed by the home seller or come out of their offer to buy. Here are a few, not all, things that home inspectors look for that might reduce your iBuyer’s offer:
Water damage
Nothing will scare a homebuyer off faster than water damage. Moisture is one of the most common causes of structural damage to a home. Leaky roofs and pipes can rot away at the home’s foundation, floors, ceilings, and framing. Left on treated, moisture causes mold that can be as toxic as it is unsightly. Water damage costs U.S. insurance companies $2.5 billion annually with the average claim nearly $7,000.
Foundation and structural issues
According to a study of 10,000 home insurance claims, 2-10.com reports that 80% of structural issues come from the movement of the home’s foundation. Water between the home’s foundation and the ground soil can expand pushing the soil out and the foundation walls start to push out into the newfound space.
Any signs of structural issues will surely be picked up by the home inspector and reported to the buyer. It is best to be upfront with these concerns to avoid them becoming a deal-breaker. The iBuyer will likely ask that these issues be resolved before making the final deal. A second inspection may be required and that cost will also come out of any proceeding offer.
Signs that your home may have structural issues include:
- cracks in the basement walls
- sagging and uneven floors
- gaps between the floorboards and walls
- a visible leaning of the structure
- gaps around door frames and windows
Roof issues
A home without a strong roof to protect its inhabitants from the weather is no shelter at all. An aging roof will always show signs of its numbered days and the inspector will be forced to report any visible damage or concerns about the integrity of the roof. Here are some of the signs that inspectors look for:
- out of place, loose, or missing shingles
- curled up shingles
- loss of color and texture to the shingles
- damaged seals around chimneys and vents
- visible bowing, dipping, or leaning of the roof
Happy seller, happy buyer
Even if there is a delay in closing the deal due to an unexpected poor value inspection, chances are, if you accepted the iBuyer’s offer, the deal can still be salvaged. Closing delays are not at all uncommon with an estimated 25% of home sales having some kind of delay at closing.
You, the seller, are happy with the offer and the buyer is satisfied with the investment. It is a win-win and all-around smooth transaction that real estate agents will be jealous of as you and the buyer split the agency savings. That being said, make sure you have read all the fine print and understand both your and the buyer’s responsibilities to the deal.
Remember that iBuyers, for the most part, are reasonable business folks and most disagreements can be easily rectified with some good old fashioned communication. If you find an offer too low you can always attempt to negotiate without fear of offending the iBuyer, after all its only business. Keep in mind that iBuyers base their offers on rather tight guidelines that lower their risk of investment so while there may be some room for negotiation there won’t be much.
Sell your house fast and easy
Now that you have the answer to “What is an iBuyer?” your next question should be “What am I waiting for?” There is no obligation and nothing to lose. We are connected with iBuyers representing real estate investors and consumers that are ready to make a cash offer now. Simply submit your address, sign up for a free seller account with us, get an iValuation, and watch the offers pour into your inbox. It is as easy as that.
