iBuying is a new form of buying and selling real estate that currently exists only in the nation’s largest housing markets. In simplest terms, iBuyers are large companies who can afford to buy homes quickly with cash. Although this model has some variations, the basic set up is to find homes with minimal fix-up work, buy the home at a discount price from the seller, then turn it around to sell to a buyer for profit. For people needing a quick sale that requires minimal work, iBuying may seem attractive. Let’s break down the pros and cons.


∙ Sellers do not have to stage their home or deal with showings.
∙ Sellers may choose to do their own repair work or the iBuyer will handle it (subtracting expenses from the seller’s payout).
∙ Sellers fill out a questionnaire regarding the condition of their home and then quickly receive an offer. They can accept or decline a cash offer that the iBuyer determines via a computerized model of what the home is worth.
∙ iBuyers can set up closings very quickly because they are buying with cash. Contingencies for appraisals or financing are not necessary.
∙ The risk of a deal falling through is much less than a traditional home sale because a large company is the purchaser.


∙ Because it is a low-margin business for iBuyers, they must buy property at a discount. That means a seller could potentially profit much more money from a traditional market sale.
∙ iBuyers tend to require more repairs than the average buyer in a traditional sale.
∙ Because an iBuyer uses a computerized model for offering cash, they rarely negotiate their price. That means the seller gets only one offer.
∙ Some sellers might be attracted to the absence of commissions in an iBuyer transaction, which is typically 5 to 7% of the home’s sale price. However, iBuyers charge fees for their convenience, which Collateral Analytics reported could be as high as 6 to 10% or more. When you factor in the discounted offer price, the seller is getting much less than a traditional sale.

The bottom line is that the iBuying method of selling offers a low-hassle, convenient way of selling a home. But selling at a discount price is likely to result in large profit loss to the home owner when compared to selling through a real estate broker with the home listed on MLS.

Platinum Service Realty