You have an offer to buy your house without having to go through the process of getting the house ready to list. Now, you may be very happy with the price they quote you. It’s more than what you bought the home for and you’re making a little extra, why not go ahead and cash out and go put your equity into another property.
But here’s the ultimate question. Would you rather have the little bit of money they’re offering you or would you rather have the maximum amount you can make on the open market? Yes, there’s a little inconvenience of the listing and showing process, but what’s that worth to you?
To some of you, that luxury is priceless. And for that reason, you should definitely sell to an ibuyer. There! I said it, there is a place for companies like these!
However, I’d like for you to consider this...
The type of market where one buyer controls the price is a Monopsony. Let that be your new word for the day. It’s the opposite of a monopoly. In a monopsony, a single buyer has the controlling advantage (meaning no competition), allowing them to more easily drive the price level down.
So how does that benefit you as a seller? Well, it doesn’t. You see, the best chance of getting the most for your home is when you let the open market compete for it, not when you let one entity dictate the price.
I saw one of the companies push the fact that they’ll help you understand the costs upfront. Any Realtor should be doing that for you and we provide an equity analysis for all of our clients that takes into consideration all of the expenses like tax prorations, HOA prorations, title company and policy fees, and Realtor fees. If you’re contemplating going with one of these companies, let’s talk. Let’s compare their offer with what’s happening in the open market and give you a clear picture of your potential net with each scenario. That way you’re at least going into the transaction knowing your options should their number start to change.
Because here’s the thing… Their number can change.
Many of these iBuyers will also require an amount be paid for any repair costs. For example, on the website of one of the companies that’s traded on the stock exchange, they say, “Buyers may ask you to cover their costs to close the deal. When you sell to [this particular company], we only ask for repair costs.”
So for full disclosure, in the open market we are starting to have buyers ask for a little more after inspections because they’ve come in so strong with their offer. The requests from buyers in this market are typically only on major issues and sometimes it’s just having the parties split the cost. So to have this other company have an open-ended stipulation that you as the seller have to cover the repair costs. Umm, nope. That shouldn’t be happening. Also, in this market, buyers aren’t typically asking sellers to pay their costs to close the deal.
At The Patty Turner Group, our motto is that it’s not about us, it’s about you. Our goal is to get you the most amount of money for your home based on your terms. If you need to be out of your home quickly, we can position and market the property in a way to facilitate a fast close but to also make sure you’re not leaving any money on the table.
So again, if you are considering selling to an IBuyer type company, there may be legitimate reasons why that’s a great option for you, but at least let us give you a second opinion and walk you through what is happening with the open market so you know all of your options before making this big decision.
Jennifer Shannon is a Texas real estate agent and broker, licensed since 2006.