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With the world at our fingertips, we live in a time of total convenience. However, convenience can be costly, especially when it comes to buying and selling a house, as real estate agent Jacqueline Lennon of Sea To Canyon Properties explains.
iBuyers, short for instant buyers, are companies who use technology to simplify property transactions.
iBuyers work in different ways, but the basic concept is that a company uses data and technology to assess your home’s value and generates an offer. If you agree, the iBuyer handles the responsibilities of owning, marketing, and selling the property. Depending on your chosen service, you gain the advantage of a guaranteed all-cash offer and greater control over your moving timeline.
During the COVID-19 pandemic, preferences shifted to contactless ways of buying and selling homes. During this time alone, a study found that Zillow Offers, Opendoor, Offerpad and RedfinNow collectively spent more than $512 million buying homes in Los Angeles, Orange, Riverside and San Bernardino counties.
These innovative firms emerged with a bold commitment: to provide rapid and seamless cash offers for homes, reshaping the real estate landscape with the iBuyer concept. Nevertheless, what started as a so-called revolutionary method for purchasing and selling homes has demonstrated a few deep cracks in the foundation.
Current research findings strongly suggest that homeowners engaging with iBuyer services may face notable financial setbacks, encompassing reduced sale prices and increased transaction expenses. Research from Collateral Analytics, a real estate data firm, suggests that iBuyers cost sellers anywhere between 13-15% of a home’s sale price. On the other hand, real estate agents cost just 5-7%. Take for example the average price of a home in California of $750,000, and that is a difference of $60,000 on the sale of a home.
In an evolving market, the iBuyer concept may not deliver the profitability and value that homeowners truly deserve. Real Estate Expert Jacqueline Lennon challenges the allure of iBuyers – noting that sellers are forsaking thousands in the name of convenience, in addition to limiting their market reach.
“Real estate agents have in-depth knowledge of the local market conditions, trends, and neighborhoods,” Lennon says, “They can provide insights and guidance on pricing your home appropriately, which is crucial for achieving a successful sale at the best price. iBuyers may not have the same level of local expertise and they are in the market to buy low with a quick turnaround to sell high.”
“Furthermore, iBuyers often charge you fees that can be a lot higher than traditional real estate commissions. These fees can include service charges, repair costs, and other expenses related to the transaction.”
Lennon notes that, “Any needed repairs to the home before selling are discussed with the real estate agent who knows what needs to be done to sell or what can be negotiated, often saving you time and money. A real estate agent is motivated to sell your home at the best possible price based on the current market conditions.”
In the ever-evolving landscape of real estate, it’s clear that traditional real estate approaches, guided by experienced agents who possess a deep understanding of local markets, can provide valuable insight into negotiating deals.
While iBuyers may offer convenience, the value of a seasoned real estate professional cannot be overstated when it comes to navigating the complexities of selling a home and maximizing its worth. In today’s dynamic market, it’s the expertise and commitment of a traditional real estate agent may assist sellers in obtaining a desirable price.
Find out more about Jaqueline Lennon of Sea to Canyon Properties by visiting the website.
