What is iBuyers?
In a nutshell, iBuyers is a platform that uses technology as a lever helping those with property move that property.
The key here is, the middle man of a realtor is essentially excised from the transaction. What happens is that iBuyers functions as the realtor. You set up a profile, and then they connect you with a buyer.
It is a site similar to “We Buy Ugly Houses”, and you can get a cash sale out of the arrangement. The big difference is that you are going to find homes that are in excellent condition featured on iBuyers, whereas the “Ugly Houses” site is more focused on properties that are falling apart.
The catch is, as a realtor ultimately takes a cut of property value to keep food on the table, so does someone helping you get your home through an iBuyer platform.
Depending on the situation, one or the other of these alternatives may provide you a better outcome. You’ll have to think critically and weigh the pros and the cons.
For example, if you’ve got a property worth $1,000,000, then you can get a diminished realtor fee, because they know if they don’t haggle with you, some other realtor will get a percentage of your home’s value. Accordingly, they are more willing to diminish their percentage so that you’ll go with them.
Factors mitigating negotiation
If you are going with an online option that has no direct individuals involved, then you may not be able to negotiate so well. That said, if you are dealing with someone on iBuyers directly, there could be some flexibility here.
Every situation is different, so it is important to carefully weigh the specifics of your unique property.
Here is what things are probably going to look like through an iBuyer platform. You’ll have a home you are trying to sell at, say, $50k. Well, the iBuyer platform will pay you $40k to $48k for the property so they can sell it at a markup and make $10k to $20k on it.
It is like a used car dealer. Those aren’t the exact numbers, just a reference point.
If you are selling your car to a used car dealership, they are apt to quote you a price lower than Kelley Blue Book. So say your car is worth $10k, they might buy it off you for $8k, then fix it up at their shop and list it for $14k, knowing it will probably sell around $12k. They get a $2k to $4k profit (depending on the cost of work), you walk away with cash, everybody wins.
Well, similarly, this is what you can expect from an iBuyer situation online. You are going to get a slightly low-balled price, but there is a tradeoff: you get the home sold off quickly and can move on with your plans. Ask yourself: what is time worth? Well, time is worth money.
The impact of time
If you wait two months to sell a property, to turn the proceeds into another house, it could sell out from under you before you can put a downpayment down on it. That said, another, a better opportunity could open up in that time; so ultimately, you’ve got to weigh your specific situation carefully based on the information you’ve got where you are.
One thing that iBuyer does which helps you make the best choices here involves an offer beforehand. Essentially, you give them the right information about your property, and they’ll tell you what they’re willing to buy it for. If that amount is greater than your house’s value after a realtor exacts their fee, then it may be worthwhile to go with the iBuyer option.
If that option is left, then you’ve got to weigh more complicated pros and cons. Here is what you need to do: research carefully, and use the consultation to inform your choice. Some resources help describe what’s available through iBuyer—for example, in the following link is a robust guide to iBuyers that is quite extensive, and covers in greater detail much of what has been glossed over here.
Something else it’s paramount to consider as you go about selling property in the present market concerns the contemporary crisis assailing the world. It is expected by many realtors that the market will go “bust” as it did in 2008, but that this won’t fully manifest until some time in 2021, as this video made July 31, 2020, suggests.
Learning how best to deal with analysts
Now, you can’t take the word of one or even a hundred analysts over the conditions which presently define whatever real estate market you’re a core part of. However, you should pay attention to what they’re saying, and look into their real estate credentials to determine if they seem like a reputable source of information.
If the market is about to crash next year, as it did in 2008, then selling soon even for a price that is less than your total potential property value could be your wisest option. However, some analysts truly believe in the “economic ‘V’ “, and that is not a concept that should be ignored. Donald Trump himself expects there to be a “V”-shaped recovery.
Essentially, the world understands that there has been a very real recession. Everybody is aware of this. This recession—or depression as some say—is one of the worst, if not the worst, in history. However, that which initiated it is different than any other similar recession. Accordingly, it is expected that a potential rebound of historic proportions is on the horizon.
It may very well be that in 2021, should Trump be elected for a second term, that the market will not only rebound but become more dynamic than it has ever been. However, there is a very real possibility that it will go the other way should he not be elected. Also, regardless of the election, factors beyond political control could swing the market either direction.
Not all communities are volatile despite the present situation
There are communities, though, which have remained constant regardless of the political intrigues that have gripped the world since January of 2020.
For example, Colorado’s real estate market is exceptionally sound right now, even as New York City and Los Angeles are seeing the volatility of a negative kind that is expected to “drop the bottom out” eventually.
Also, in situations where the bottom does drop out of a given community, there is a profit to be made for those savvy enough to make it.
When property values drop, they can be bought up for pennies on the dollar and used accordingly. Sometimes a home becomes a rental complex, sometimes a rental complex becomes commercial real estate.
Weighing your options for the best choices
Whatever you do, you want to have a game plan. If you are going to live in the home that you are able to acquire after you sell the older property, then the time you live there should either increase equity or produce value requisite to what you’ve lost through the sale.
If you are not planning to live there, you’ll want to see equity expand other ways.
Provided you take your time, do your homework, and conduct research, you’ll come out on top of a given real estate transaction. Options like iBuyers are providing fine solutions for many property owners, and going this route may very well be worth your while—just be sure to look into all the associated angles carefully.
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I am Adeyemi Adetilewa, a media consultant, entrepreneur, husband, and father. Founder and Editor-In-Chief of Ideas Plus Business Magazine, online business resources for entrepreneurs. I help brands share unique and impactful stories through the use of public relations, advertising, and online marketing. My work has been featured on the Huffington Post, Thrive Global, Addicted2Success, Hackernoon, The Good Men Project, and other publications.