Selling on the Open Market compared to using an iBuyer

Happy November!  We hope you are enjoying the cooling weather as we approach the beginning of the holiday season!  We’ve been asked by a lot of homeowners this year about investors wanting to purchase their homes directly.  We will summarize our discussions below.

Home Sellers:
If you are a homeowner, you may have received solicitations from various companies and investment groups wanting to buy your home directly.  We can relate. Personally, we get direct mail, phone calls, and texts from multiple parties EVERY day!   Also, as real estate professionals, we are contacted all the time by wholesalers and home-flippers looking for this kind of opportunity.  We have written extensively in the past as this buy-and-flip industry started and evolved.  It is a fast-changing industry and a big business.  There are large Wall Street backed companies as well as small privately funded groups. Their approaches and strategies continue to evolve with the changing market.  But one thing remains the same: They are in the business to flip your home and profit from your choice to bypass the open market.

Sometimes these flip-investors can make very attractive offers.  Here is an industry insider tip:  If your home is not at the high end of your neighborhood/market and meets certain criteria, you don’t really know how high it can fetch in the open market.  Our traditional methods of property valuation are solid in a traditional market.  In a market where the demand is higher than the supply, we have been consistently achieving sale prices above market value. This is a pleasant result for our sellers but not really an “unexpected surprise”.  The flip-investors also know this. That’s why they can sometimes offer “market value”, when they know they can sell it for higher later.   The bottom line is, if you want to walk away with the most money, you will achieve it in the open market, where the buyers compete. Selling to one party, without competition, is when you will leave money on the table.  We see this when homeowners sell their homes directly to their family members or friends without listing them on the open market.  In those cases, there is the relationship factor.  But, you have no relationship with those flip-investors. They have algorithms to help them calculate their maximum profit.  You need to look out for yourself.

Some homeowners asked about the “convenience factor”.  That is pretty much the ONLY angle of the flip-investors.  They claim to offer fast and convenient closings.  Actually, these flip-investors will absolutely evaluate the property and make sure they are making a good investment before they would close on the purchase.  They promote the idea that selling your home is difficult and scary, so you will sell to them.  How much money are you willing to forfeit to go this route?  As real estate professionals, our business is to make the home selling process easy for our clients.  The testimonials from many of our clients repeat the comment that we made the process smooth and easy.  Most of the time it is not harder than selling to flip-investors.  Most people only sell a few homes in their lifetime.  Make sure you do it right! Talk to us first.  We will help you evaluate your best options!

Until next month, take care!

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