Are you looking to sell your Dutchess County home quickly? Do you struggle with finding the right buyer and the perfect offer?
During your search, chances are, you’ve stumbled upon iBuyers and local “we buy houses for cash” companies.
Now, you’re wondering which one you should go with. Of the two, which is better?
Here, we’ll discuss the pros and cons of using an iBuyer vs. a cash buyer, and which one is better for your needs.
What is an iBuyer?
An iBuyer is a real estate company that uses algorithms and technology to buy homes “instantly”. They typically buy houses that can easily be sold retail (via the open market on the MLS) without doing any repairs, or updates.
They do NOT buy houses “As-Is”
There are several national iBuyer companies homeowners contact to sell their homes. The largest companies include Opendoor, RedfinNow, Offerpad, and Zillow Offers.
Even though each iBuyer is different and operates in various ways, the general idea is that the company estimates the value of a home, before seeing it, and makes an offer. If a homeowner accepts the offer, the iBuyer then begins it’s due diligence.
The due diligence process is where the “Sell Instantly” advertising claim usually falls short. In reality, after the seller accepts the offer is usually when it becomes a nightmare for the seller. After acceptance, the iBuyer then starts their due diligence, which is a painful and time consuming process and often results in a much lower offer.
Here’s what the typical iBuyer’s due diligence process looks like:
- The iBuyer will conduct a physical inspection of your home. Even though home inspectors can conduct an inspection in less than a day, actually scheduling one can take a long time. It’s not unusual for it to take 2 weeks (or longer) for the iBuyer to set up an inspection. This can be a huge issue if you’re looking to sell right away.
- After the iBuyer finally sets up the inspection, a licensed professional will perform a top to bottom inspection of your home. Then, you’ll often have to wait for the report to be written and sent to the iBuyer and then for the iBuyer to review the report, which can take up even more time.
- The report will probably reveal that your home requires repairs or that it needs improvements.
- The iBuyer revises / lowers their offer. In cases where a home needs significant repairs or improvements, the iBuyer will give the seller a revised purchase offer. As a result, the home sale could end up falling through because the seller is not happy with the final offer. In fact, only a small percentage of Zillow customers who apply for direct purchase through Zillow Offers follow through with the sale of their home – the homeowner doesn’t accept the final offer. This is likely due to the fact that homeowners typically don’t receive a fair-market price for their homes.
So, while selling your home to an iBuyer may seem appealing because you may want a faster transaction, this isn’t always the case.
In fact, you’re better off selling to a cash buyer because the process is typically faster and a cash buyer is more likely to buy your home in its current condition. As a result, you can sell your home at the fair-market price.
The Rise and Fall of Zillow’s iBuying Service
After just 3 years of iBuying homes, Zillow Offers is backing out of the home-flipping business. The company is now trying to sell hundreds of homes in key markets for less than it initially paid.
This was a surprise to many real estate experts because the company was seeing astronomical growth from its iBuying venture. Unfortunately, this type of growth is what “broke” the company, stressing the business to its breaking point.
Essentially, Zillow Offers’ underestimating the costs of bringing the houses up to marketable condition is one of the main reasons the company failed. Buying houses remotely, it also was not in tune with the local market and over estimated the houses’ worth.
I, for one, welcome the exit of this faceless corporation from the market as it makes room again for rational investment in our Hudson Valley real estate market. In my opinion, Zillow Offers’ demise underscores the importance of human logic and connection when it comes to purchasing and selling homes.
This Zillow setback illustrates that real estate is, in fact, very local. A cash buyer does more than pass money across the table to you.
The Disadvantages of Using an iBuyer
- Lower offers: Because iBuyers are from out of town, and often out of state, they don’t know the local market, what your house will really sell for once they own it. Therefore, in order to protect themselves from that, they make extra low offers to cover that unknown.
- Deductions: After agreeing to an iBuyer’s offer, they assess your home to see if anything requires repair or replacement before they resell. If it turns out they do need to make a repair, they’ll deduct costs from what they pay you. As a result, the assessment could take a huge chunk out of your original offer and waste months of your time. The offer you get from a national iBuyer might seem irresistible at first. But it can often change once they perform their inspection or an issue arises.
- Limited availability: iBuying is relatively new and is an experiment in progress. As a result, some iBuyers only operate in key cities. Plus, many iBuyer companies only purchase homes that meet certain qualifications and that are within a particular price range.
- Won’t Buy As-Is: Most of the time they are looking to buy a home that’s in “retail” condition (no repairs, empty and cleaned out, no building violations or permitted improvements, good roof, good heating system, etc).
- Not Local: Unlike with local buyers, you’re likely not dealing with these entities on a personal level. This means that you won’t experience the same trust, reassurance, and human connection you can feel with a buyer from your community. ‘
The Benefits of Selling to a Dutchess County Cash Buyer
A good cash buyer will work with you through the various road bumps to buy your house. Things like not having to empty the house, or not bringing things up to code, requiring repairs, or working with title issues. I’ve bought houses in all kinds of condition and challenges while always making sure to offer the very most I can for your house.
It makes all the difference to have someone local buying your house. Also, having local expertise in the real estate market will often allow the local cash buyer to make a better/higher offer than the out-of-town iBuyers.
Advantages of selling your house to a (real) cash buyer:
Sell Your House As-Is
Cash buyers will buy your home in its current condition. This means that you won’t have to come out of pocket for repairs, updates, or getting improvements approved by the town, before selling.
At Bob Will Buy It, I buy homes with cash, which means I’ll buy your home exactly the way it is. When you work with me, you won’t have to worry about things like painting or plumbing issues. I’ll assume those burdens from you.
When selling to a cash buyer, the offer you get from them provides more certainty. That’s because you’re not accepting an offer with tons of contingencies and aren’t dealing with the risk of a low appraisal.
And if you don’t have time to hire contractors and make major repairs, you can really benefit from selling to a cash buyer.
I have never backed out of a deal. When you say “yes” to my offer, you can rest assured that I will buy your house.
When working with a cash buyer, they’re buying with “cash” (their own money) and not needing a bank loan, which makes the process simple and quick. Not having to get a bank’s approval bypasses a LOT of red tape. That’s what I do at Bob Will Buy It.
Once I get your information, I can make you a fair all-cash offer within 48 hours and I can close in as little as 3 weeks, or later, whenever you’re ready.
Check out the all the top benefits of selling your house to a local Dutchess county cash buyer, like me.