Sell Your House Online – Top 5 Options
The 2020 National Association of Realtors report shows that 43% of potential home buyers used the internet as the first step in their search to find a home. And 97% used the internet at some point in their home search. These stats illuminate the importance of having an exceptional online presence when selling your home.
iBuyers are companies that buy homes online for cash, they claim to do so quickly and without much hassle. They’ve grown in the past few years and show no signs of disappearing, though they still remain a small part of the overall real estate market. It can be tempting to jump on the iBuyer bandwagon, but before you do, it’s important to know the ins and outs of going this route.
The iBuyer model is designed to streamline the selling process. If you want to get the job done fast, it will likely be appealing to you. iBuyers use artificial intelligence to analyze information provided by the seller and data from the real estate market to get price offers. The goal, like most things in this technological world: get what you want fast and in a few clicks. In this case, snag a buyer and get a cash offer.
So, why isn’t everyone selling their home online? Convenience comes at a cost. Most iBuyers will advertise that their rates are on par with a traditional Realtor’s fees. But when you read the fine print, it’s not often the reality.
Let’s take a look at the top 5 options to sell your home online:
X. Zillow Offers – Cancelled
Around for about 17 years, Zillow continues to be one of the biggest and most popular names in the world of online real estate.
After dipping their toes into the iBuyer game in 2019 with their Zillow Offers program, the company has since decided to cancel. They are now in the process of helping their existing customers who opted into the program and selling off their remaining inventory. Zillow’s downfall was in making too many above-market offers to sellers, which Zillow claims was due to a problem with their algorithms. Zillow will no longer make a cash offer for your home.
Redfin has become one of the most popular real estate websites for people shopping for a home, and they’ve expanded their services to sellers with RedfinNow, their iBuyer program.
They’ll buy your home, for cash, and then turn around and sell it themselves. But before get excited about that, know the costs involved. Their total fees average between 6-14% of the final sale. This is after providing you with an investor price, which is probably going to be well under market value. They also assess a fee for any repairs they deem necessary.
Keep in mind, Redfin is a company looking to purchase your home for cash and then turn around and sell it on the public real estate market for more money.
Opendoor was founded in 2014, and went public December, 2020, so they will be around for a while. They embody the core intention of the iBuyer model: making instant offers.
Opendoor’s commission, called a “service fee” on their site, is currently set at 5%. However, that doesn’t mean their investor-based cash offer will be market value. Also that 5% fee is subject to change – at their whim. If you read the fine print on their website, “Service charge is subject to change, and has historically been as high as 14%.”
Many public reviews complain that the initial offer went down and fees went up after they started the process with Opendoor.
Like Redfin, Opendoor is a company looking to purchase your home for cash, then immediately turn around and sell it on the public real estate market for more money.
Offerpad hasn’t made its way to Oregon yet, but they’re expanding and picking up steam. In their third quarter report for 2020, they reported a revenue increase of 190% (to $540.3 million) and a gross profit increase of 169% (to $53.1 million).
While that’s impressive, watch out. In addition to their 5% service fee, they can charge you whatever repairs fees they want. And of course, like the rest of the iBuyers above, they have no obligation to make you an initial offer that reflects fair market value.
Like Redfin and Opendoor, Offerpad is a company looking to purchase your home for cash, then immediately turn around and sell it on the public real estate market for more money.
2. Homelight Simple Sale
Unlikely Redfin, Opendoor, and Offerpad above, Homelight reaches out to a network of investors looking for the best cash buyer for your home. However, in our testing out of their site we’ve found those estimated investor offers to be significantly under market, even by hundreds of thousands of dollars. Homelight is up front about this on their site, which we appreciate. Homelight doesn’t get paid through buying your home and putting it back on the real estate market themselves (like Opendoor, Offerpad, and Redfin), Homelight is likely earning its money through this program by earning referral fees from investors who have the opportunity to make a cash offer on your property. If you don’t like the investor offer Homelight will try to connect you with a local real estate agent, so Homelight can make a referral on that introduction. Basically Homelight is generating income by earning money on referrals, either to agents or investors, a middle-man of sorts.
1. EXP Realty Express Offers
Express Offers works in a similar fashion to Homelight. EXP Realty is a national Realty company with a massive network of local cash investors. Their process works like this, an EXP Realty agent ( like myself ) visits your home and takes down basic information with your permission. Then the EXP Realty agent goes back and enters all of that information into the Express Offers platform. Within a couple days, that agent can present you with the best local and national cash offers available for the current condition of your home. The fee if you take the cash offer ( in my case ) is 1.75%. Typically the investor’s cash offer can close very quick. If the homeowner doesn’t like the cash offer amounts, they can move on or decide to list the home for a higher price on the public real estate market with that EXP Realty agent or any other. No obligation. If you’re interested in seeing what a network of local and national investors might pay for your home as-is cash, then give us a call today at 503-714-1111 and we’ll schedule an appointment to tour your home.
Want to get top dollar?
List your home on the public real estate market.
Ibuyers like Redfin, Opendoor, and Offerpad are mega corporations looking to make a profit off of your home. You’re selling to one corporate entity who will simply turn around and do what you could have done for yourself – list it on the public real estate market to sell it for more money. I don’t think this is the best option and wonder if it is in the customer’s best interest in any situation.
Cash investor networks like Homelight and Express Offers are a little better, since at least there is more than one cash buyer you’re pitching the home to. Also Homelight and Express Offers don’t sell the home themselves after its sold (seems like a conflict of interest to me) they act more like referral networks, working to put investors and sellers together. They themselves are not the investor. They earn money through referrals, making the connections.
Ultimately the highest price you can obtain for a fixer, or home of any type, is to list it on the public real estate market. Make the home available to the broadest audience possible. Why limit your options? If a real estate agent can get you a price 10% – 20% higher than any private investor is offering, is their 4% total commission rate (the rate my team charges) that bad? Plus an experienced real estate agent (licensed since 2003) will know how to make the home sale process as smooth for you as possible. There are a lot of tricks to the trade to making the home sellers life easy.
If you’re interested in getting a public market value for your home or seeing what Express Offers can do for you, reach out. Give us a call at 503-714-1111 or chat with our bot on this site. We’d love to talk with you today.