( Welcome to Greg Elsner. For his first series here, Greg’s 3-part series deals with advantages and disadvantages of Denver i-buyers. They offer a different, unconventiaonal way to sell your house)
Homeowners have lots options when it comes to selling their property. Most elect to use Denver Realtor® to list and sell a home. And, some attempt to sell the property themselves. However, a new option for selling a home is available through what’s called the iBuyer model. You know, you have seen the new advertisements for Open Door, Zillow Buys Homes, etc.
Denver I-Buyers Offer Quick, Direct Sales
I hadn’t even heard the term “iBuyer” until a few years ago when I started to see the trend take off . That happened in Phoenix first. Since then the sector has grown and is starting to becoming an appealing approach for some home sellers. As more and more iBuyers enter the market, we need to assess the particular advantages and disadvantages their systems provide. Join me on this series of blog posts as we examine the Denver iBuyer model and what it means for sellers. Trust me. There are plenty of both positives and negatives.
So, what is a Denver iBuyer? While there are many iBuyers available here. Companies such as OpenDoor, Knock and Zillow Offers attempt to expedite the process and simplify life for the seller by purchasing the property directly. An iBuyer is a company and every iBuyer is different. Each iBuyer company may offer specific incentives and each has a different fee structure that should be examined prior to making any choice.
Home sellers can address the primary concerns of time, effort and potential income when making their decision of which route to go. Also, Seller should do their due diligence about the bottom line, net offer. Because, many iBuyer offers fall short of real market value. The iBuyer method may fit the needs of certain sellers. But, expect to pay for the convenience of not going onto the whole real estate market.
They Are Just Corporate Buyout Companies
A report by real estate data firm Collateral Analytics suggests that the iBuyer model isn’t really anything new. “In fact, iBuying can be viewed as comparable to corporate relocation companies that have been around for many years, providing a guaranteed sale for employee transfers, but now offered to the general public and paid for directly by sellers.”
An iBuyer is a company that hopes to purchase a home directly from a potential seller. By doing so they can appeal to sellers who need to move quickly. Because, there is no need to look any further for a qualified buyer. Collateral analytics points out: “For motivated sellers who want a predictable sale date and need to move, perhaps a long distance from their current location, there is no questions that iBuyers have provided a welcome alternative to traditional brokerages”. However, that shortened timeline and “predictability” comes at a significant cost. For example, the seller pays fees and sometimes can suffer from a low appraisal.
Sellers will likely give up significant portions of their home’s equity in trade for a “fast and predictable” transaction. But we’ll go over that all next month as we continue our iBuyer conversation! Please join me for the next article in this series of Denver real estate blog posts where we will discuss the risks and rewards of working with an iBuyer company making offers in Denver.
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