Selling homes can often be one of the most stressful life events for many of us. After all, with so much to see, sort, and do, it’s never a relaxing time. Often, there are many hoops to jump through from viewing houses, corresponding with agents and solicitors, and signing off paperwork, not to mention arranging removals teams and packing up belongings.
But what if there was a simpler way to sell your house and take the hassles out of moving home? This is where the idea of iBuying comes in. The streamlined process helps to ensure that you can sell your home in as few steps as possible, and it ensures a quick, easy, and hassle-free experience overall.
What Is An iBuyer Company?
An “iBuyer” or “instant buyer” is a real estate broker that gives an instant cash offer to a seller. They hold the property until it is bought again and perform necessary repairs. iBuyers offer additional services that make the sales process easier and more convenient, including mortgage advice, legal support, home staging, and marketing.
What is an iBuyer?
The term “iBuyer” or “Instant Buyer” comes from the idea of selling your home online through a digital agent’s company. Simply put, an iBuyer is a company that makes an offer to buy your home instantly online. This comes in the form of an evaluation and estimation. Then, if you’re happy to accept the estimation and proceed with the sale, the iBuyer company will take all of the hard work out of the selling process.
What do we mean by this? The iBuyer team handles all of the necessary assessing, marketing, selling, and arranging of viewings and, eventually, your home’s resale. In the meantime, they directly buy your home from you, so you can get almost instant money without waiting months for the home to sell.
The main advantage is that you get an all-cash offer, which allows you to collect money right away and gives you a lot more flexibility in general. In a nutshell, iBuyers make switching far more streamlined and simple than traditional marketing and sales approaches.
iBuyers help to remove, reduce and smooth out many different aspects of the selling process, including cutting the time needed, reducing risk of seller concession and chains, eliminating the need to take on a mortgage, and handling repair, closing, and legal costs on your behalf.
Generally speaking, traditional real estate transactions are slow and complex. With an iBuyer service, you can eliminate the hassle and stress of these transactions, making the house move feel like a breeze!
Why Is An iBuyer A PropTech Business?
PropTech, otherwise known as Property Technology, uses technology and software to help aid and assist real estate needs, including both sales and purchases. The main premise behind PropTech and marketing is to make selling or buying a home far more efficient and streamlined without having to navigate complex hurdles or challenges.
This could be an online space to view houses and homes on a real estate listing website, in its simplest form. Many now offer an augmented reality (AR) and virtual reality (VR) experience so you can view the property from the comfort of your home.
PropTech can also come in the form of sensors and measuring software to increase accuracy in measurements of rooms and space and also map out 3D models of a home using 3D rendering tools. Another use of PropTech is to 3D print these models, which proves especially useful for developers to quickly map out a site and see how changes could affect design choices.
In the modern architectural world, many spaces are mapped in VR to show what the end-user will see and see how design can be changed quickly and practically for the designer or architect.
How Do iBuyers Work?
Not all iBuyers share the same business models, but many of the iBuying systems make money by reselling a home for a higher price than it was bought for. Otherwise, they often offer additional services, such as title deed changes, insurance, repairs, and financing options to provide the business with additional income.
iBuyers are not necessarily “house flippers.” House flipping works by looking for older or run-down properties and making a series of renovations to then sell on at higher prices. These value-added services help to make an income for many investors; however, this is vastly different from the iBuying system.
iBuyers typically target homes that are already in good standing order or condition. However, they will also buy poor-condition properties. They try to make offers in line with what normal buyers would pay or estimations an agent offers to create a fair price for the seller. They may carry out minimal repairs, but they will typically then resell at a fair market price, allowing a profit to be generated from each sale.
Often, the iBuyer model works on a fee-based system. Service charges vary, but, on average, are around the 5% figure based upon how quickly they estimate it will take to sell the home. The main service on offer is a simpler sale and, as such, means that the process is stress-free.
iBuyers will generally buy and sell homes directly. While 87% of house sales still go through an agent, more and more people are choosing to sell with an iBuyer company instead.
Popular iBuyer Examples
1 | OpenDoor
OpenDoor is one of the leading iBuyers on the market, providing high customer service and care. The range of services on offer also enhances sales and ensures that all customer needs are met. This may be as simple as title deed changes or estimating costs of repairs.
They offer many in-house services, such as competitive pricing. All steps are taken care of and strong customer support is available to talk through any concerns you may have during the move.
2 | Offerpad
OfferPad is another iBuyer company that aims to make house selling quick, easy, and stress-free. Some of the main selling points for OfferPad are that they have stronger cash offers than many of the other iBuyer companies out there and allow you to sell your home without having to list it on the open market.
They help take the stress out by removing the need for viewings and offer flexible closing days to ensure that the time is right for your anticipated moving date. They also offer a free local moving service to assist in the house move, ensuring all worries are taken care of. OfferPad also provides a 3-day extended stay in case the purchase of another house takes longer than expected.
OfferPad has strong marketing power and can often carry out any home improvements in advance to save time during the moving process.
3 | Simple Sale
Simple Sale is an iBuyer company that offers rapid home sales through an instant cash offer. All that is required is to enter the property details, receive the offer, and complete the sale. This simple 3-step approach helps them stand out to potential customers making the process quick and easy. Some key benefits include:
- No legal costs
- Completion date to suit you
- No chains like with an estate agent
- No hidden fees
- No numerous viewings
- Dealing directly with an experienced buyer
- Stress-free sales process
- Direct communication with one person, rather than a team of salespeople
Properties can be sold or purchased from any location and in any condition. They also purchase properties with tenants currently residing there.
Pros and Cons of iBuyers
There are countless different pros and cons associated with choosing to sell your home through iBuyer schemes. Naturally, it’s critical to weigh these up when selling to either an agent or an iBuyer company. There can be lots of factors that influence a decision, such as the current circumstance or time constraints, on whether to use an iBuyer or agent. Some of the most notable benefits and drawbacks of partnering with iBuyers are summarized below.
- Easy and efficient selling process
- Takes the stress out of moving
- The iBuyer completes all the hard work
- No viewings or weekly marketing calls
- Flexible moving dates
- Control is put in your hands
- A full breakdown of costs is often available
- Many iBuyers offer a “peace of mind” guarantee
- Convenient solutions
- All repairs are carried out
- Higher rates, often between 4-10% compared to agents, which are around 4-6%
- Lower priced offers are often made
- Deductions may be made following inspections
- Little to no negotiation room
- Often do not offer renting services for current tenants
Overall, iBuyers can help to streamline the process of house buying and selling. They manage to make the process stress-free and enable people to sell their homes quickly for cash. iBuyers are essentially online real estate agents that offer an instant proposal for buying a person’s property. There is no need anymore to arrange viewings or handle repairs.
On the other hand, for the advantage of instantly selling your home, these services charge a bit more than regular real estate agents.
The most popular iBuyer companies are Opendoor, Offerpad, and Simple Sale.
If you want to learn more about PropTech, sustainable real estate, smart buildings, and smart cities, feel free to take a look at our other blog articles.