Connecting with a real estate investor can expedite your home’s sale, but buyers beware!
We’ve all seen the little signs on the side of the road: “We buy houses!”
Most of us view them with skepticism — “Clearly this is a gimmick, someone looking to make a quick buck at my expense.”
While these sketchy-looking signs should cause the buyer to beware (or in this case, you — the seller should be wary), there are some legitimate companies that will buy your house lickety-split. No need to prepare your house to put on the market, no inconvenient showings, no back-and-forth negotiating with prospective buyers.
Working with a reputable “iBuyer” is a way to sell your home speedily and painlessly.
The “i” stands for “instant,” a great option for those who need — or simply want — to sell their homes quickly and relatively hassle-free.
Opendoor and Offerpad are two of the most well-known and reputable large-scale iBuyers. Redwood Offers is a local alternative that gives sellers even more home-selling options.
Opendoor
Opendoor buys homes using debt from institutional investors. They claim they’ll make you a competitive offer and charge a flat fee that typically ranges between 5 – 8% and goes no higher than 14%. You receive an all-cash offer, a simplified home selling process and the ability to move on your own timeline. They focus on homes that are in good condition, unlike many of the “We Buy Homes” companies that target distressed properties and homeowners who are desperate.
Offerpad
The service fee for Offerpad is typically 7% but can range anywhere between 6 and 10%. When you sell your house to Offerpad, they give you a cash offer within 24 hours and you can pick your closing date at your convenience within 90 days. If you’re not ready to move into your new home on the day of closing, Offerpad lets you stay up to three days free and up to 60 days for an additional fee of up to 1.5% of the sale price of your home. They also offer a free local move with professional movers.
Currently, Offerpad’s service areas do not include the Washington, D.C. metro area.
Drawbacks
Besides the fact that many large iBuyer companies do not service the DMV area, there are other factors to consider before committing to selling your home to them “instantly.”
Any time you try to sell your home too quickly, you run the risk of not getting top dollar. A MarketWatch study of multiple iBuyer transactions concluded that these customers net, on average, 11% less than owners who choose to sell their homes on the open market after considering fees and other costs. This could be a loss of tens of thousands of dollars.
Another disadvantage for some is that the biggest, most reputable iBuyers typically purchase only homes that are in decent condition and sometimes only homes within a certain price range. This shuts the door on some homeowners.
Further, if your home has unique and intangible qualities — perhaps it is historic or has an amazing view — iBuying offers will not typically reflect these distinctions. Homeowners who have nice, ordinary homes in nice, ordinary neighborhoods tend to get the most out of iBuyers because comps are readily available and rather straightforward.
Redwood Offers
CENTURY 21 Redwood Realty has a great alternative with added value above and beyond the companies outlined here. Your Redwood agent will give you options so that you can dramatically speed up the home sale process while still allowing the open market to set the price.
