IBuyers (a moniker for platforms using new technology to make offers on homes and close quickly). Those IBuyer purchase offers aren’t designed to benefit the home seller; they are intended to benefit Corporate Shareholders. The Sellers are conditioned to get low offers and will pay equal or higher fees than from a typical Real Estate Broker and Agent.
1) Inaccurate valuations. Zillow’s “Zestimate” is like all the other “Valuation”(Non-Appraisal) web sites. They simply exist to get eyeballs and personal information from their website for advertising or transaction purposes.
2. Low Offers. No person, especially a Corporation that wants to purchase your home directly (With No Market Exposure) will not be offering you “Market Value.”
3. Serious Fees add up quickly. Most folks wince at the average 6% Fee Real Estate Agents Charge. Some Sellers have associated the iBuyer low offer to the average 6% Realtor fee.
Here’s the math: Not only will you, the seller, get a less than real market offer, there are Fees on top of that, like “Experience” Fees, Service Fees combined, exceeding what the Real Estate Agents would have charged you.
Still not convinced? When you sell your home, would you rather pay an agent who represents your interests or a company that serves their interests?
4. A majority of markets don’t need this ‘Service”. In many residential communities across the country, currently have tight Inventory, homeowners don’t even have to put money into updates or upgrades. Too many individuals want to buy homes.
5. Reducing Inventory will Raises Prices. Housing inventory continues to set record lows. Buyers are frustrated, bidding wars and home values escalate.
6. Home Buyers are Competing with Flippers. Investors don’t always flip houses for buyers. They often rent them out. Although not all renters are poor caretakers, there isn’t much incentive to put effort and care into a property.
Get enough renters on the street, and the curb appeal drops significantly. Renters come and go.
7. The negative effect of low offers. Imagine if two or three homes on your street are taking an instant offer. If this becomes a trend, appraisers may not be able to disregard the data.
Moreover, if you, the seller, make an immediate offer, you are messing with your neighbors’ home values.
That might not be your problem today, but it could be in the future.
Who benefits from instant home purchase offers?
Instant home purchases are designed to benefit the IBuyer or investor under the guise of convenience to the seller.
How Can Sellers Protect Themselves?
Contact a State Certified Residential Real Estate Appraiser. Their core mandate is to protect the Public Trust in Real Estate Transactions. The Average Fee for an independent Market Appraisal is 500.00, which is pennies on the dollar compared to paying the IBuyer Fees.
And, at the very least, interview a Licensed Real Estate Agent for a Comparative Marketing Analysis before accepting an instant offer.