Using an iBuyer vs a Traditional Real Estate Agent

There are a number of ways on how you can sell your home. Real estate agents for one is what most people know and use. Or you can use iBuyer which is less known.

So what is an iBuyer?

“Instant buyer” or iBuyer for short, pertains to a real estate company that buys and sells homes through technology. It eliminates the use of a real estate agent, home appraisers, and other parties usually involved in the home buying process and uses their own software instead. The calculation of the home’s value is done through an Automated Valuation Model (AVM) which bases its valuation from the algorithm produced in an existing database of properties and transactions. This is then used by the iBuyer to make an offer which could only take a few days or even just a few minutes. 

How to sell a home with iBuyer?

To sell your home with an iBuyer, you need to request an offer using the company’s website or app. Submit the offer together with the basic photos and information of the property, which includes the address, age, square footage, and features. The iBuyer then reviews the offer, makes an estimate of your home’s value and sends it to you through an offer. 

It sounds pretty easy right? Sounds convenient BUT is this the best way to sell your home? Will you get the real value of your home? Are you leaving money on the table? Let’s find out.

Disadvantages of using iBuyer to Sell Your Home

1. Lower Purchase Price - iBuyers don’t really understand the local market and typically use the lower value homes to estimate the value of your home. 

2. Excessive Fees - iBuyer models vary, but one thing they have in common is having excessive fees and additional fees that are not reflected on their initial offer. This is on top of a discounted offer price plus convenience fees. 

3. Repairs Assessed by the Company - iBuyers handle most of the steps in the transaction process including the repairs, which could be a huge deduction from the offer. 

4. Limited Qualifications - iBuyers target homes that are newer, already in good condition and only need minimal work. iBuyers don’t typically purchase older homes, houses that need a lot of repairs, or higher-end properties. 

5. Availability - iBuyers are not available in many markets. 

Pros of Using a Real Estate Agent to Sell Your Home

1. Get More Exposure - Buyers contact real estate agents to show their homes. If your home isn’t listed, you won’t get the exposure to multiple buyers.

2. Multiple Offers - Since real estate agents have access to a vast number of buyers, the chances of getting multiple offers is high. 

3. Negotiates Inspection Result - The proven negotiating skills of real estate agents come in handy in this part of the process. The agent can negotiate how much you will pay for repairs.

4. Homes Sell at Top Value - The agent is able to show more people your home, entertain more offers, negotiate the amount of money you will spend on repairs, ultimately selling your home at a higher price than iBuyer would.

Convenience wise, iBuyer may sound promising. But is it really worth your time and money? Would you rather choose a costly method that comes with a number of limits and uncertainties? Or would you rather opt getting a savvy seller's agent and doing a traditional sale where convenience is still very much attainable without the cons mentioned above?

Selling with an agent does provide the flexibility and ease that you seek. And that is at a lesser expense. Real estate agents are more reliable and can help you get a better price for your home. With profits maximized and convenience not out of the picture, selling your home with a real estate agent is your best bet.