The pros and cons of using an iBuyer to sell your home.
As a homeowner these days, you have many options when it comes to selling your house. Aside from the traditional route of picking a reputable realtor and putting your home on the open market, you can also go FSBO (For Sale By Owner) or sell it to an investor or company. These have been the standard choices for a while now, with the recent addition of what is known as an “iBuyer.” So what does selling your house to an iBuyer look like?
An iBuyer is loosely defined as “a company that uses technology to make an offer on your home.” Which simply means they rely on the data of an algorithm to come up with a price for your home, versus the traditional way of comparing similar recently sold properties. Zillow isn’t the only company that keeps track of home prices, and other companies have leveraged the data in order to start purchasing homes in certain markets. These companies look for houses that are in good shape or need quick fixes in order to purchase them, take short term ownership of the home, make any needed repairs and sell them quickly.
Who are iBuyers?
The four main iBuyer companies are OpenDoor, Offerpad, Zillow Offers and Redfin Now. OpenDoor has been at it the longest (since 2014) and has the biggest market share. According to Zillow’s ATTOM data Solutions, OpenDoor purchased just over 10,000 homes in 2018. Currently, none of these companies operate in the ...
The real answer to "how much is my home worth" is by actually listing it for sale.
Everything else is just a guesstimate of varying degrees of accuracy and believability.
So, how much IS your home worth?
The short answer is that it's worth whatever a buyer is willing to pay for it.
The longer answer is that your home is worth...
What someone is willing to pay for it.
If listed for sale on the open market.
Will depend on how well your home has been prepared for market, the marketing exposure it gets and whether you selected a competent Realtor or not.
The prevailing market conditions at the time your list your home.
And potentially on whether it's an all-cash offer or not.
Pretty simple, huh?
Obviously, putting your home on the market just to determine it's current market value is a little extreme.
So, how can a homeowner find out how much their home is "worth"? And what are their limitations?
(1) Online home evaluations.
The granddaddy of these is the infamous Zestimate from Zillow.
Simply enter your address and within a few milliseconds, voila, up pops the current market value of your home. So easy and convenient, right?
Easy and convenient it might be but it's about as reliable as the Seattle Marines making the playoffs!
Zillow has never set foot in your home, has no idea if your kitchen is original, if your roof and furnace need replacing or if you remodeled the kitchen and bathrooms...
They say don't look a gift horse in the mouth. But when it's a Trojan horse, you do! - Eric Johnson
Usually, as part of the home buying process, the buyer hires a licensed home inspector to inspect the home so they know what they are purchasing. However, sometimes, the seller will pre-inspect the home before listing it for sale and share that home inspection report with interested buyers.
There are two specific uses of a seller home inspection:
- The sellers do a pre-listing inspection of their home for the purposes of finding and fixing any issues before putting the home on the market.
- The sellers do a pre-listing inspection their home for the purposes of finding and fixing any issues before putting the home on the market AND intend to provide a free copy of the home inspection report to potential home buyers as a marketing strategy.
The usual home purchase procedure is for the buyer to do a home inspection AFTER the seller has accepted their offer. The buyer then has about 10 days to complete the inspection and get their home inspection report. The buyer can then either accept the home as-is, request some repairs and/or a price drop, or just walk on the sale and get their earnest money back.
The inspection will include the (1) home itself and the property it sits on (2) the sewer line from the home to the main sewer line in the street (depending on the age of the home) or alternatively (3) the septic system if the home is not connected to the sewer system. Note that in WA State at least, septic inspections are done after mutual acceptance and is paid for by the sellers.
In a hot sellers' market, like the current Seattle real estate market,...
Some people can rebuilt their car's engine and some of us wouldn’t know even how to replace a dead headlight bulb. For you go-getters out there, who like to go it alone without the middleman, good on ya and kudos for giving it a go… including trying to sell your home without an agent.
However, here’s the reality. According to statistics from the National Association of Realtors (yeah, those guys), your chances of successfully selling your home via the For Sale by Owner (FSBO) process is a mere 10%. Allegedly, for those FSBO homes that do sell, they sell for less than agent-assisted sales, however, you will save on agent commissions which will offset some of that diffeence. The odds are stacked against you and there are many reasons whys FSBOs fail to sell.
The focus of this post is not to get you all riled up telling you why you would be better off listing your home with a Realtor. I’ll leave that up to the 10 agents who will call your every day while your home is on the market, each jostling to convince you why you should list your home with them. Prepare to become very popular and screen your calls.
No, the focus of this post is to hopefully help you improve your odds of successfully going it alone and giving youself the opportunity to give us Realtors the proverbial middle finger. The vast majority of homes listed by agents do sell, while the vast majority of FSBOs don’t. So what’s the difference? Well, obviously, Realtors are doing something right and you just need to learn how to copy them.
Selling a home is not rocket science but a least try and do the basics properly so you improve...
When you list your home for sale, the objective is to get buyers in the door, make them fall in love with the home and make a great offer for a smooth, hassle-free closing. Obviously, part of the aforementioned formula, is, well, letting people into your beloved home. People who you have never met before and probably never will, will be parading through your home and kicking tires. And yes, some of them will even pee in your pristine, spotless toilet!
This can be a stressful scenario for some home sellers, especially those who appreciate their privacy and those who keep their homes neater than a pin.
Very few people are willing to buy a home sight. Buyers will want to see your home in person before committing to making an offer and you need to make your home available to them.
Yes, it's your home and you are completely free to control buyer access to it. However, it is important, if at all possible, to make your home as accessible as possible for that first week after you hit the market to maximize your chances of a quick and successful sale. If you overly restrict access to you home, you are reducing your chances of getting the best possible price for it.
Will every buyer respect your home with the same level of respect you show it? To be brutally honest, probably not. It's best to be ready yourself for some minor, short-lived nuisances, but when you close it will be worth it all.
First of all, how do buyers get access to see your home?
The first way buyers come to see your home is by viewing the home with their agent. The Buyer will contact their Realtor...
It’s easy to get overwhelmed with information and advice from all directions as to the things you need to do when selling your home. You read an article that details the 27 must-do items. They couldn't come up with a nice round list of 30?
Selling your home is not rocket science. Do the fundamentals and do them well and your home should do really well too.
In my personal opinion, these are the 3 critical, non-negotiable action items you need to focus on when selling your home. If you don’t do these 3 properly, then you are just leaving money sitting on the table or your home might not sell (even in a hot market). What you add in blood, sweat and hard cash will come back to you in shovelfuls at closing.
Critical-P #1: Preparation
Stage your home inside AND out. By staging, I don’t mean just rearranging your furniture or hiring a staging company who bring in a few sticks of furniture and “voila, it looks simply daaaaarling darlings!”
By staging I mean, you make every square inch of your home and property (both inside and outside) look its very best. Yes, it’s a lot of work and is something you should start planning at last 6 months, or even better, a whole year before you intend to put your home on the market. Plan ahead and avoid stress overload later. Procrastination is over rated!
Here are some home preparation items to focus on. Preserve your sanity and hire some help rather than trying to do it all yourself.
Declutter and start getting rid of stuff you haven't used on years. One word: Goodwill!
Make sure to focus on ...
Your home is about to hit the market. You did your homework and chose a really good Realtor who knows their stuff. Your home is looking the best it has looked in years. It looks so good now, you joke with your Realtor that you’ve changed your mind about selling.
You’ve decluttered, you’ve scrubbed and cleaned until the inside is Q-tip clean, you serviced the furnace and cleaned the roof and gutters. You've focused on the most important things to fix before listing a home. Fido and his GI issues are safely sequestered at Aunt Ellie’s. Your home is priced perfectly and those photos, in your humble opinion, are worthy of the front cover of Architectural Digest!
Your home is most certainly ready for prime time and the heaving masses of eager buyers.
The question is: are YOU PERSONALLY ready?
Obviously, getting your home ready is critical. However, you, yourself must also be prepared for the market and what is about to happen over the next few days, weeks and months.
Are you sure you really want to sell your home?
Yes, it’s getting a little late in the game but are you 100% committed to selling your home? What’s the real reason you want to sell?
People sell their homes for many reasons. Some have to sell because they are relocating for a new job and some have to sell because they lost a job. Some sell because the home has grown too small for their growing family and some sell because they have become empty-nesters and the home is now too big.
When the reason...
Many areas in the US are firmly in the grips of a strong sellers’ market including homes for sale in Seattle WA. Competition between buyers for the limited inventory is intense and multiple offers is currently the norm. Everything goes in cycles but for moment at least, sellers are comfortable set in the driver’s seat, king of the castle and masters of their domain (that is, until they turn around and try and buy their next home).
If you're selling your home and you and your Realtor have done the basics like preparing your home properly, pricing it correctly (don’t get greedy!) and take great photos, you can usually expect to get more than one offer.
In a slow market, you anxiously wait for an offer, any offer, to come your way. In a hot market, offers pour in the door and now you have to decide which one of the bunch is the best one. We’re only human and 9 out of 10 human sellers will automatically want to grab the offer with the highest price scribbled on it.
But not so fast…..
At first look, that highest price offer might look great, but you need to dive a little deeper to see what lies below the surface. You have to look at the WHOLE OFFER to see what the buyer is really offering you.
First of all, what are the components of a real estate offer?
When a buyer makes an offer on your home, they will sit down with their agent and fill out a series of standardized forms that detail what the buyer wants to offer for your home plus the conditions under which they are willing to buy the home.
The main components of offer to buy a home are as follows:
The Purchase and Sale Agreement which is an overview...
A new listing alert pops into my inbox. I click on it hoping it might be a good match for my home buyer and proceed to review the photos….
“What is THAT!” I mutter to myself. “No really, what is that? I can’t tell from the photo”.
I continue muttering to myself…“Sorry, listing agent, I should have realized you were using one of those disposable cameras they leave out at weddings and you grabbed a bunch of them thinking they would come in handy for an upcoming listing”.
Yes, I do get a little self-righteous about these things and yes, let him without sin cast the first stone. But hey, my conscience is clear, just show me where to aim!
The majority of Realtors are conscientious individuals and do a really good job for their clients. However, what surprises me is those home sellers who are unfortunate enough to end with a dud agent, why they don’t complain or do something about it?
Bad Realtor photos are just one issue but can be an indication as to how the agent operates and their overall level of professionalism. Home sellers should be able to pick up on a bad agent BEFORE they sign on the listing contract dotted line. If the agent is comfortable with the seller, other agents and the general public seeing their bad photography handiwork, then maybe they don’t care about a whole list of other items that constitute basic standards of good service.
Other warning signs of a bad Realtor:
- Bad property flyers, using those same bad photos printed on cheap paper (possibly in black and white). Plus, after the initial...