GET AN OFFER ON YOUR HOME WITH A PRESS OF A BUTTON?
REAL OR TOO GOOD TO BE TRUE?
Instant Buyer (Opendoor, Zillow Instant Offers, Perch, Knock) Reviews & What To Know In Advance
If you type “iBuyers” in Google, you’ll get about 150,000 results. Searching for “iBuyers reviews” yields about 45,000 results.
There’s a lot of fear and uncertainty circulating the industry. It’s partly the reason why almost a third of “iBuyer-related” searches are reviews about the product.
iBuyers theoretically make cash offers on your home within a few days.
This is attractive for sellers looking to make a fast close and avoid stagings, showings, and more. However, it comes with a handful of tradeoffs.
If it sounds great in theory, why is there a lot of confusion about iBuying? Primarily because:
To get started, a seller needs to fill up an online form with around 10 to 15 questions – for EACH iBuyer platform.
The form collects details about the size of your space, number of bedrooms and bathrooms, any major improvements, special features, and mechanical and structural issues.
Some platforms require photos, others will crunch figures solely based on what the seller is able to manually input.
The iBuyers then calculate your home features alongside comparable properties, tax rates, and other factors. These are crucial details crunched by computers to calculate your offer, all without having seen your house or its upgrades.
Within minutes or a few days, you get an instant offer via email. Should you accept, some iBuyers will send an agent to conduct inspections on your home, suggesting repairs that will further eat away at your initial offer.
If a seller wishes to compare offers from other iBuyers, he must go through the same process with more than a hundred other iBuyer platforms.
iBuyers differ in packages and not all of them will buy your home. While some zone in on purchasing tear-downs, others select homes in good condition. Some will issue decent offers, while others are infamous for lowballing.
The end result is often disappointment: offers that are ridiculously below market value. Opendoor reviews and Zillow Instant Offer reviews are rife with disgruntled clients who feel like they were low-balled by iBuyers who missed crucial details about their properties.
Others common complaints include:
Since the business model relies on volume, iBuyers typically turn away from homes that need a lot of work. Their systems are set up to focus on properties that can sell fast on the open market anyway (i.e. sellers with good homes that need money fast).
Most iBuyers have very specific criteria that help weed out bad investments. These requirements vary from iBuyer to iBuyer, but here are a few criteria the typical iBuyer system will use to classify “not so good deals”.
iBuyers are attractive to customers who value the certainty of a sell over offer price. A lot of sellers who use iBuyers are:
It is highly recommended for sellers to seek representation when coordinating with an iBuyer. iBuyers are not realtors, hence, they are not bound by the fiduciary duty to get you the most money for your home.
We’ve handpicked reviews to highlight common issues customers experience with iBuyers to help you make an informed judgment.
A forewarning: Yelp was accused of hiding reviews for Opendoor and OfferPad, making it difficult for sellers to compare iBuying programs with traditional brokerages.
However, we’ve done our best to scour the web for iBuyer reviews, and we’ve collected quite a handful.
There are over 100 different iBuyers which have raised upwards of $10 billion in investment (mostly from hedge funds and international investors). The following firms have raised the most money so far:
In addition to these firms above, other spin-offs, joint ventures, investment groups, and family offices have started companies like the following:
Many of these firms specialize in different types of home, age of homes and/or neighborhoods. Also, if you google things like “Offerpad reviews” or “Opendoor reviews” you’ll find that feedback is usually fairly similar.
You’ll be asked to answer around 10-15 questions about but not limited to:
Some iBuyers require you to take photos of your home to aid in valuation.
This is a good opportunity to showcase special features or details you feel they were unable to cover in their initial rundown of questions.
If you’re planning to do it yourself versus hiring a professional (like we do), here are some tips:
iBuyers determine offer price based on a variety of factors, including but not limited to:
These factors are crunched by computers using proprietary home valuation and predictive market analysis technologies to give you an offer in a few minutes to a few days.
We have found a few anomalies in the market that sellers can take advantage of currently:
There’s one important skill to get the most out of iBuying: You Need To Fill Up Forms Diligently.
You need to have all of the details, upgrades, and issues you’ve had on your home by memory, or have all the documentation that supports this on hand to avoid mistakes.
To get an offer, iBuyers need comprehensive information about your home. Before filling up valuation forms, it pays to know the nitty-gritty of your property so you can accurately describe its features.
To get the best initial price, it is best to compare offers with other iBuyers.
Note that some iBuyers are more partial to your type of home than others (e.g. while some specialize in condos, others focus on single-family homes).
As Realtors, we list and market homes every day. We know what buyers are looking for and how to highlight your property in the most favorable light. Our photography, attention to detail, and descriptions allow us to secure competitive offers.
Submit your home to the Guaranteed Purchase Partners that have shown the highest willingness to pay for properties like yours. To easily compare offers vs. a traditional listing, click here.
It depends on the iBuyer platform. However, here’s an interesting case that we encountered while doing the research for this guide:
An Atlanta agent requested offers for his newly renovated home with Knock, Opendoor, and OfferPad to compare offer prices. His property was appraised at $495,000 but offers ranged from $265,000 on the low end to $373,000 on the high end.
This is just the initial offer he received, but since he has limited options, he’s starting the negotiation at the position of weakness. To get the best price from iBuyers, you need to get more offers. The only way to get more offers is to try as many iBuyer platforms as possible.
Once you agree on an offer, a number of deductibles come into play. iBuyers charge sellers transaction fees as high as 7% to 13%. This fee depends on a number of factors, including but not limited to how long it takes to sell your home to the risk of your home’s resale and holding costs.
Other fees involved include repairs, title insurance, escrow fees, HOA transfers fees, taxes, document transfers, and other customary fees.
It is highly advised for sellers to compare offers from other iBuyers if she intends to get the best ROI.
Some sellers allow you to negotiate their initial offer, while others have more of a “take it or leave it” approach. Typically, iBuyers issue offers 2-3% lower than what you would get if you sold traditionally with an agent.
In Opendoor reviews, Redfin Now Reviews, and Offerpad reviews, you’ll come across instances where sellers are offered a price that’s way lower than this standard. To get a better offer on your home, you must:
Opendoor reviews, Offerpad reviews, and RedFin Now reviews are rife with customers who claim to have fallen for their “bait and switch” methods.
After being issued your initial offer, the company subtracts a number of deductibles from this starting amount, including repairs, title insurance, escrow fees, HOA transfers fees, taxes, document transfers, and other customary fees.
The resulting amount, according to iBuyer reviews, is often disappointing. Here’s how to deal:
Assume a Competitive Stance
An iBuyer that knows he’s being shopped or traded for an open market is more likely to offer you solid prices for your property.
Hire a Realtor for Leverage
A lot of Opendoor reviews complain about unnecessary and overpriced repairs that eat away from their initial offer. Seeking the help of a realtor to coordinate with an iBuyer at this point grants him leverage and security.
Collect Multiple Offers
There are more than 100 iBuyers and not all of them employ bait and switch tactics. As experts in real estate, we can help you select the legitimate ones with the highest willingness to pay for your property. Compare cash offers vs. traditional listings here.
Complaints about overpriced and unnecessary repairs are all too common in Opendoor Reviews, Offerpad reviews, and RedFin Now reviews.
All of these repairs are deducted from the seller’s initial offer if the seller doesn’t volunteer to do them herself.
Sellers who are not certain if they’re being issued fair repair requests will benefit from an expert realtor who can ascertain that repairs suggested are well-grounded and fairly priced.
We can guide you through the entire iBuying process while showing you all of the offers available in the market vs. a traditional listing.
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