Feb. 26, 2019
Is It Worth It?
The real estate tech trend known as "ibuying", or an "ibuyer" is a company that will make an offer to buy your house sight unseen very quickly, and that figure is based on their own automated valuation model (AVM). Ibuyers, if you accept the offer, can usually close very quickly. They will offer a streamlined process that's fast and easy, less hassle than a traditional sale. This method can be a good choice when a seller needs to move quickly for a job, to be near family when older, a "distress" sale, where a seller needs to get out from under fast-- and other reasons. So, the model does work for some, that's true.
Sounds pretty good. Is there a catch? What, or who is actually behind the transaction? An investor. Or investors. An investor is buying the home. They're not "bad" people. They're not "stealing" homes, although there's a lot of negativity surrounding the Ibuyer model from traditional agents. And what do investors want? A profit. Can't blame them. After all, they're taking all the risk. They may end up "holding" the property for an extended period of time, which is costly and cuts into their profit margin. So, with risk in mind, Ibuyers will charge a full commission that may be greater than that of a traditional real estate agent. That's not mean or shady, it's just how that business model works. An Ibuyer will also discount the value of the home to offset the risk they're taking giving the home seller instant liquidity. They're giving the seller cash. The buyer, or investor, is using his own money. He's not financing.
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