What is an iBuyer? Would You Flush $30k Down The Toilet...
Hey everyone it's Corey Toushin over at the Corey Toushin Group at LIFE Realty. Hope everyone's having a great day. In an effort to keep you informed and educated on everything in real estate, I wanted to come and talk about a very interesting subject today, the iBuyer.
What is an iBuyer? An iBuyer is essentially a company that will offer an efficient, fast, and easy way to purchase your home for cash and give you a quick close. Most of the time they advertise that it's much easier, much more efficient and more enjoyable than listing with a full time committed real estate agent. I'm here to break down some myths, and I'll let you know what you could potentially be losing if you essentially were to sell your home to one of these iBuyers. I did two real time studies of listings that I recently listed and closed and compared them spec to spec compared to what an iBuyer submitted an offer for. I have the offers on my desk, so this is very real. I want to show you how the numbers break down.
The first property on New River Circle, the highest price an iBuyer was willing to pay was $382,000 for the property. The cost to sell the property to the iBuyer including their convenience fee or efficiency fee, whatever they name it, they all have different names for that. Then plus title fees and transfer taxes, all your typical seller closing costs included then that was about $25,292. This breaks down to a 7% total to sell the house, which netted to the seller a number of $356,708. Now, when we close the property, this house was on the market for about 30 days. So still a very quick sale. We have a contract for $420,000 including a 6% commission to sell and additional closing costs for the seller amounted to $29,940, which equated to about 7.1%, about the same, but netted the seller $390,060, which was a difference of $33,352. That's huge! I don’t know about you, but I could do a lot with $33,000.
Study number two Handel Avenue. iBuyer submitted an offer at $490,000. That was their highest bid. Their costs to sell was $42,315 which comes out to about 8.7% and a net to seller at $447,685. When we listed the property we put in place our custom marketing campaign, our mega open house, everything that we do, we grossed the seller $507,500. It costs them $35,750 to sell the property. Again including commissions, fees, taxes, all that good stuff. Which amounted to 7.1% and a net to that seller for $471,750 for a total difference of $24,065.
Put these two real-time studies together and you have a difference of about $30,000. At the end of the day, the intention of these companies is to purchase your own for cash and then once it's closed, put it right back on the market and sell it for a profit. I just want to be sure that you're educated and informed and as to what your options are and what would essentially result from those options. If you have any questions about this, feel free to reach out to me anytime. Always happy to answer your questions. Have a great day, and I'll see you next time.