Why do people sell a home? There are many reasons, but broadly speaking, they sell their home to relocate or to take profits. No one chooses to sell a home to make more money for their real estate broker. But working with an I-Buyer may have that effect. How? Three primary areas could cost you money.
Asking price: I will rely on market-based comparables and my extensive background and knowledge to help you establish a reasonable and achievable asking price. An I-Buyer generally operates off an algorithm that establishes the market value for your home and the company offers to purchase your home for a percentage of that computer derived price.
Commission: I charge a consistent fee comparable to most full service agents. That fee is generally split with the agent that sells the home and then we take our profit, minus our expenses, between ourselves, our brokerage and our staff. An I-Buyer may charge from 9-15% for their service.
Repairs: Let’s face it – almost every home that goes on the market has something that could be repaired, replaced, repainted, or reworked. Part of my service is to assist you in determining what repairs are necessary and which will increase the value of your home beyond the cost of the repair. I can then help you find a reputable contractor from my extensive lists of contacts. An I-Buyer will charge “market value” for any repairs that they deem to be required on your home.
West USA Realty I-Buyer
Asking price: $300,000 $290,000
Commission/Service Fee (%): 6% 9-15%
Commission/Service Fee ($): 18,000 29,000
Repairs: 2,000 7,000
Your price: $280,000 $254,000
Cost of “convenience”
(Assumes 96.67% asking price,
10% commission, and
no repairs required.): $26,000
So WHY would anyone use an I-Buyer? Convenience is the primary selling point. I-Buyers may let you move whenever you want and may even offer to move you. But at what price are you buying that convenience?
Let’s look at a side-by-side comparison on a home valued at $300,000.
Title, escrow, and HOA fees would be the same in either scenario, and this is a hypothetical example.
So why does an I-Buyer cost so much more? None of it is designed to help you. I-Buyers spend their advertising budget on TV and Internet ads, attempting to generate you as a lead to sell to them rather than marketing your home. They must repair your home, pay utilities, and sell it (all while holding it for 3-4 months and paying interest or losing revenue on the money they have invested.).
Most importantly, an I-Buyer does not represent you. What does representation mean? It means that I have an obligation to look out for your interest and get you the most money I can for your property in its current condition. It also means that every question I answer to you is based on what is best for you not what is most likely to make the property close escrow. This simply isn't the case if you sell to an I-buyer. You are on your own.
And remember, should market conditions deteriorate, an I-Buyer must either lower the price they are willing to pay for your home or increase their fees. My fees are completely disclosed up front, and are not subject to change.
I consistently get the highest prices for my clients, in the shortest time. An experienced professional agent selling your home can overcome obstacles that I-Buyers will not. If the convenience of moving on your schedule is worth $26,000 to you then an I-Buyer may be the way to go. But if you want someone to vigorously represent you with the knowledge, experience and track record to make sure that the sale of your home nets you the most money it can with the least amount of liability and tribulation on your part, you should probably call us!
Next month, we will talk about those “discount” brokers!
Call us for fast, friendly, experienced professional assistance that has a trusted track record you can entrust the most valuable asset you have!