Realty Executives Arizona Territory

Karen Winton

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Karen Winton

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Television Home Buyers: ARE THEY THE WAY TO GO???

(Published on - 6/17/2021 10:35:19 PM)

The answer: probably not. No television home buyer, AKA ibuyer (Zillow, Opendoor, Redfin, 72 Hour, etc.) is in the business of paying full market value (FMV) just to break even on a subsequent sale. They will generally offer something 'marginally' less than their opinion of market value. Their opinion is based on market statistics/algorithms that almost always fail to consider that ALL real estate is unique; two seemingly equal homes directly across the street from each other can have vastly different values. 

The ibuyer will still inspect the property and likely will 'adjust' the FMV to allow for what they consider to be needed repairs and upgrades.  So, while most ibuyers advertise they will buy the home AS IS and, in fact, they will, often they will do so only after reducing the FMV to reflect the needed repairs!

The ibuyers also state that the seller will not pay a commission. Again, true, but the ibuyer almost always fails to mention their 'service fees' until they are in negotiation with a seller. These service fees are deducted from whatever their opinion of the final FMV turns out to be, just like a real estate commission! These service fees will vary from ibuyer to ibuyer but will generally range from 6% to 14% of the FMV.  Note that some ibuyers will give an offer of FMV and then adjust that offer through their service fees to address needed repairs rather than reducing the FMV. In almost all cases the service fees will equal at least 6% of the FMV even for a pristine property.

Another major consideration when selling in today's market: selling to the ibuyer takes away any possibility of achieving a higher-than-list-price offer which is a frequent occurrence in today's reality of few listings.  This lost opportunity attacks the most active segment of the market where a seller is more likely to generate multiple competing offers in a bidding war.

By using a Realtor who works for the seller (ibuyers work only for themselves!), sellers maximize the opportunity to obtain a higher price --- sometimes to the tune of $10's of thousands of dollars more!  A final word: ibuyers generally limit the FMV to a maximum of $600,000 and likely won’t offer on homes with un-permitted additions, wells and septic systems

Every seller should consult with an experienced Realtor (such as Karen Winton of Realty Executives Arizona Territory) before accepting an ibuyers offer.  The price the seller might pay for the convenience of selling to an ibuyer can be costly beyond beliefShould you give me the opportunity and privilege of representing you,  I will work hard to get you the very highest price possible!

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