There will be much more coming from me on this very important topic, but I won’t be able to thoroughly cover it in this segment simply because I could literally write an entire newsletter and even do a seminar/workshop on this topic due to all of the misinformation being given to consumers on these programs. Now don’t get me wrong, these programs have a fit for some people who just wish to do a quick sale but in doing so will likely be giving away equity in their homes in process and I will illustrate that here in a moment with an actual experience. I would like to say that if you know anyone considering this as an option have them contact me as there are plenty of alternatives with cash investors that will still likely net much more to the seller than many of these programs are offering.
The popularity of these programs have grown because they offer the convenience of a cash offer with a quick close for someone selling their home who doesn’t have to experience the process of listing a home and waiting for a buyer to come around providing the seller(s) a more profitable deal. Remember one important thing as you read through this…these folks are NOT in the non-profit business. They are backed by some big time Wall Street money wishing to cash in on the real estate business and you almost have to equate it to a fix and flip type of transaction off of someone. They will also try to throw consumers off by marketing that you won’t have to pay any realtor commissions when using their program, but guess what? They simply re-named it a Selling/Management Cost and/or Service Charge that easily equates to charging the consumer 6% or more for the transaction at a below market value they offer for the home. In addition, you get stuck paying all repair costs they see fit to bring the house up to par for them to re-list it and make a profit off of you!! When selling a home during a traditional transaction you may or may not get asked to make certain repairs as this is a negotiable item in that process and will most likely be MUCH less than the iBuyer program will require you to do, period. iBuyer Beware for sure!
Let me give you a quick example of a recent experience I had with this…This last Fall I had a listing where I asked my sellers if they would entertain talking to Zillow and Open Door just to see what type of offer they might being to the table. Graciously they accepted and if it had been a great offer we would have likely taken them up on it. In fairness, between Zillow and Open Door, Zillow gave the better offer but they were still way below market where we ended up selling the property at. This is a property that ended up selling for $372,000 and netted the sellers around $350,000 after all fees and commissions were taken into consideration. Zillow offered this seller a price of $353,000 that would have netted the sellers around $329,000 after their “Selling Costs/Service Charge/Closing Costs/and Repairs”, but yet they advertise they don’t charge a commission. Open Door offered these sellers a price of $342,000 and after all of their “Fees” and with no commission and would have netted my sellers around $224,000. Now it doesn’t take much to see that by working with a reputable realtor like me and going through the process or properly marketing their home they profited an additional $21,000-$25,000 or 5%+ that would have otherwise gone to one of these iBuyers. Imagine what they are doing with $1,000,000+ type of properties when you use percentages!!
Always, always make sure you get a second opinion and talk with me if you or anyone you know is considering one of these programs, as you can see could end up costing thousands and thousands of dollars in lost profit.
Learn more as it relates to this topic by visiting:
iBuyer Programs on Hold – https://fullerhomeoptions.com/ibuyer-programs-on-hold/