Surely you have seen all the companies advertising they will buy your home for cash in any condition and within a very short period of time? This actually sounds pretty appealing – you don’t have to do any repairs, you don’t have to make your home “show ready”, you don’t have the hassle of showing your home and wait for an offer – why wouldn’t everyone choose this way to sell?
These “I-buyer” companies all offer slightly different programs, but it’s important to note: All of these companies are in business to make a profit:
(1) They are going to mark up the property by 5-20% and re-sell it within a few days of purchasing it so they have to purchase under market value.
(2) All of these companies still charge sellers “commission fees”
(3) Most of these companies have additional “administrative fees” which can be quite excessive.
(4) Though they may contract to buy your home “as is”, they often do inspections and either require the seller to do the repairs or ask for significant price reduction from their initial offer to cover repairs.
(5) These companies have many restrictions on the homes they will buy – condition, price range etc. We’ve had clients turned down for having homes that were too old, on power lines and even a townhome which had monthly fees that were said to be “too high”.
(6) A reputable real estate agent will almost always have contacts with cash investors who can offer the same quick below-market closings without the additional fees these companies have.
(7) Many sellers are disappointed when they reach the closing table their net profit is much smaller than they anticipated.
Should you choose the I-buyer model, keep in mind that you can still have an agent represent your interests. You can list your home with a traditional agent and work with an “I-buyer” company. It’s important to have your own representation so you’re sure you clearly understand the process and have all the info you need to make the best decisions possible.
So before you take the “quick-and-easy-sale” route, be sure you are aware of the facts!