Seller Beware!

The so-called i-buyer programs are making their way across the USA with some markets seeing strong penetration by internet firms offering to buy homes. The companies offering these programs include some national giants like Zillow.

Sellers need to be aware that enough of these transactions have closed to provide a large pool of data and these plans often cost sellers dearly. Many sellers are attracted to the idea of NOT paying a real estate commission to a brokerage. What they seem to overlook is the "service fee" applied to these i-buyer programs that are often MORE than a typical real estate brokerage fee. On top of that they buy the house for a price that is usually about 10% UNDER the local market value.

Make no mistake these guys are going to resell the house. They are going to make a fat profit and it comes at seller's expense. Data shows that the typical seller nets about 10% LESS money using these methods. Sure they are fast, they can often close the deal in 10 days. They allow sellers to pack up and move and things are convenient for the seller. But that convenience comes at an awful price. A $350,000 house might take 4-6 weeks to sell in our market right now but I can't imagine someone living in a $350k house making $25,000 a month in income so why would they leave that much money on the table save a few weeks time?

I could imagine a handful of situations where these types of offers are a viable option for a seller. But the overwhelming majority of sellers will be far better off hiring a local real estate pro to help them sell. I sell a lot of houses and I make a pretty good living, I am NOT going to give an extra $25,000 of my hard earned cash to some corporate, Wall Street scumbag to profiteer off my stupidity. Seller's are well advised to do a lot of research into these i-buy offers. There has never been a free lunch, and there still isn't.

Seller beware!