Tag Archives: Selling


What’s an iBuyer?

The real estate agent’s quick guide to everything iBuyer. And, no. iBuyers won’t be taking your job.

blue Home graphic surrounded by tech graphics

If you’ve been living under a rock, you probably haven’t heard the latest buzzword in the real estate industry: iBuyer. Even if you have heard about it, you may still have some questions or concerns.

What is an iBuyer? Is it the right choice for sellers? Are iBuyers taking over real estate agents’ jobs? I-Buy who?

No fear! We’ve gathered all the information you and other real estate agents need to know about iBuyers.

 

WHAT IS AN IBUYER, & HOW DOES IT WORK?

iBuyer services take a modern, technology-based approach to the real estate market and those looking to buy or sell homes. iBuyers use a strategy similar to companies like “We Buy Ugly Houses” by giving you the option to sell your home quickly for cash. However, unlike the “We Buy Ugly Houses” approach, iBuyers focus on homes in good condition. Typically, an iBuyer isn’t looking to flip a property or take on anything that needs extensive repairs.

To get started with iBuyer, a seller visits the website, plugs in the address of the home to be sold, and fills out a questionnaire about the property. Within 24 -48 hours, the seller receives an offer on the home. iBuyers base these offers on technology like the automated valuation model (AVM) to get the quickest “comps” for the property. From there, a seller can decide to move forward with the iBuyer and set a closing date.

 

PROS TO USING AN IBUYER

  1. Speed & Convenience

According to realtor.com data, the median home spends 58 days on the market. However, selling to an iBuyer can take only a handful of days (or longer if the seller prefers). This arrangement would be ideal for an out-of-state property inheritance or a sudden job change resulting in a quick change of living arrangements. It’s also perfect for sellers who just wish to have the control of the time frame. Let’s face it. Selling a home can be somewhat of an inconvenience. Between keeping your home tidy, having the listing agent come in to stage, and leaving at a moment’s notice for a showing, selling your home can become a hassle, and iBuyers can help decrease the time a seller has to deal with these stressors.

  1. Low Risk

When selling with an agent, there’s a certain level of uncertainty. Potential buyers could back out for different reasons, at which point the seller and listing agent are back at square one. When selling with an iBuyer, though, transactions almost never fall through. The only problem a seller may run into is getting a lower appraisal than expected, which may result in a lower offer from the iBuyer.

 

CONS TO USING AN IBUYER

  1. Lower Profits

While convenience is nice, a seller will pay for it. Typically, iBuyers charge a service or convenience fee that can range from 6-9.5% or more. In fact, one MarketWatch study of 26 home sales to iBuyers found that these sellers average around 11% less than owners who sell to a traditional buyer. Granted, traditional home sales have the 5-6% commission fee, but a recent study from Collateral Analytics found that home sellers will pay an average of between 13% and 15% more in fees to an iBuyer than they would to a traditional listing agent.

  1. Limited Availability

Currently, iBuyers are in select major markets only. And while iBuyers are expected to expand, they’re not something available to every home seller. There are some iBuyers that are even more selective than others about buying homes and the condition of each home.

 

HOW TO STAND OUT TO POTENTIAL SELLERS

  1. Show Your Value

For the home seller who’s on the fence about whether to use an iBuyer, you must show them the value of using a listing agent. If a potential seller wants to get as much value as they can for their property, remind them part of that value is the expertise you bring to the process. An iBuyer can’t put a price on the beautiful ocean view or the impeccable 19th-century hardwood floors of a home, but a listing agent can and knows how to use those unique and sometimes intangible selling points.

A great agent knows the amount of work that goes in to preparing comps, creating a marketing strategy, staging the home perfectly, communicating and negotiating with potential buyers, and so much more.  Communicating this value is key to putting yourself above an iBuyer.

  1. Educate the Seller

There is something about a listing agent who’s transparent and helpful to a seller that ensures agent security. Educating your seller and consumers will help them understand the value of each option and give them the opportunity to choose what is right for them. Not every seller will want to use an iBuyer and some won’t want to use a listing agent. Every seller is unique. However, giving consumers their options builds trust with them, and it’s another point on your scoreboard.

  1. Have the Right Tools

What good is all this information if you can’t physically show a real-world example based on their own situation. Our free FANAgent ONE app gives agents the opportunity to compare a potential seller’s net profits with a click of a button. With the iBuyer Comparison Calculator, agents can plug in the information and calculate an instant comparison to show their seller.

 

FINAL THOUGHTS

New technology and processes will always shake up any industry. iBuyers are simply one of these “shake ups.” As time passes, consumers will become more educated on the differences between iBuyers and traditional selling techniques, and not every seller will want to use an iBuyer.

Remember these words: DON’T PANIC.

iBuyers, such as Opendoor, Offerpad, Zillow Offers, and others, are expanding into major markets rather quickly. However, iBuyer transactions make up for a small percentage of real estate transactions. In 2018, 620k homes were sold to iBuyers, compared to 5.5 million homes sold without iBuyers. In fact, Rob Barber, CEO at ATTOM Data Solutions, a nationwide property database, predicts iBuyers will only account for about 15% of the real estate transactions in the long run.

 

So, don’t panic! There is still value and will always be value in a seller hiring a listing agent.

 

What’s one way you can communicate the value of using a listing agent today?


Channel 10 Interviews CEO Aaron M. Davis on Zillow’s New SELL NOW Feature – Zillow Offers

Channel 10’s Courtney Robinson discusses the pros and cons of Zillow Offers and other iBuyer programs with Florida Agency Network’s CEO, Aaron M. Davis.

While iBuyer programs may offer convenience, it doesn’t equate to more money in your pocket. Consumers must be AWARE.

On Monday, October 21, Zillow launched “Zillow Offers” as a new way for consumers to sell their homes. The technology allows a consumer to go onto the APP, answer some questions about their home, and receive an instant cash offer.

But is it really the best way to sell a house?

10Investigates’ Courtney Robinson spoke to Joe Locicero, owner of 54 Realty and the Zillow agent for the Tampa Bay area. Robinson also had our very own Aaron Davis weigh in on what’s to come of future iBuyer technology.

“While it takes away stress and offers sellers convenience, there is a cost. On average, sellers pay a 7 percent fee. Traditional real estate agents charge between 5-6 percent,” Robinson advises.

To read the full story and learn the pros and cons, click HERE.

 

 

 

 

How Can I Improve My Home’s Value?

Buyers generally seek the least expensive home in the best neighborhood they can handle. Like the guy in the video says, you want to present a home that fits in the neighborhood but doesn’t stand out too much.

For example if neighbors are all 4 bedrooms, 3 baths and 3000 square feet additions that make your home 5, 4, and 4000 will make yours harder to sell.

Improvements should make it show well and fit well in the neighborhood. Last-minute capital investments in large structural changes aren’t likely to pay off.

But cosmetic upgrades like paint and landscaping help a home “show” better and often do pay off.

Of course, all systems and appliances should work to get a top price. To make your home competitive and attract buyers and bids work with a professional real estate agent and start early.

How Is A Home Marketed?

As you’ll see in the video, every home and market is a unique situation. Good marketing plans are specific to both. But every plan will include: Preparation Pricing and Marketing Activities.

Preparation takes time – typically, months. Homes must be in “show” condition all repairs and upgrades complete and all photos and video completed before the home goes on the market.

Pricing, likewise, should be planned in advance. Your broker will advise on both the best price and the best TERMS things like closing costs and seller credits to balance sales speed with sales price. Once the home is on the market it will quickly be entered in the MLS and will show up in Internet searches by agents and buyers.

Your broker will advise other marketing activities including advertising, signage, showing and open house events so make the best of your situation. Their aim is to get negotiable offers, and then take the offer you accept through the closing process.

Which Square Footage Figure Should I Use?

Home size is one of the key figures used in comparisons.

But you may have different measurements to choose from,  as you’ll learn in this video, including builder, appraiser, tax records and possibly owner records.

Which one is right, and which one is best?

The official figure is the one in tax records – typically, the county.

Any other figure must be documented by a builder’s floor plan an appraisal or an official floor plan, prepared by a company for a fee.

If your house has been remodeled and you’re planning to sell you may want to confirm that the official record matches your actual house – and update if required.

Most lenders will require an appraisal which will verify the figures you used. So be accurate and keep records to make the most of your sale.

 

How Do I Set The Price On My House?

While this video simplifies things to help you remember: your aim is to get the best price AND terms in your market during the period you’re selling.

Market conditions interest rates and competition all matter.

The price you want, and the price a buyer will pay are framed by those complex conditions So pricing isn’t completely predictable.

Other factors include:

  • How your home compares to other homes for the same buyers
  • The inventory of homes and the level of buyer demand

Your needs also affect negotiations – for example, if you must sell quickly – but the final price will be determined by the market not by your needs.

Buyers look at the same comparables and market conditions and they want to pay as little as possible while meeting their needs.

Remember that the price isn’t the entire deal – repairs, closing, points, appliances and other factors can all change the value you finally receive. Listen to your broker, stay informed, be patient if you can and make your best reasonable, unemotional decisions.

What Details Can I Ask Brokers In Advance?

This video tells you what any real estate professional would tell you. Ask them:

  • How long do homes in my neighborhood currently stay on the market?
  • How would you price my home?
  • What data did you use to arrive at that price?
  • How would you market my home?
  • What activities would you expect of me to market my home?
  • How will you handle representation if one of your buyers is interested in my home?
  • May I speak with sellers you’ve recently represented?
  • How long a period would you want on a listing agreement for my house?

It’s best to ask these questions, and be comfortable with your choices before signing a listing agreement.

6 Selling Mistakes

If you’re selling, don’t do these things – take some notes from the video!
1. Don’t Sell Before The House Is Ready.

If it doesn’t present well, it won’t sell well.

2. Don’t Over-Improve

People buy houses in neighborhoods.

If yours is so “improved” that it sticks out you’re hurting your chances at selling.

3. Hire Wrong

Make your agent choice for business reasons.

Personal relationships matter, but experience and expertise will determine financial success in your sale.

4. Don’t Hide Anything

Covering up or ‘failing to mention’ real problems doesn’t work.

State disclosure laws are strict and you can be sued after the sale for anything that should have been made clear.

5. Don’t Rush

You should know about your mortgage, including pre-payment penalties your market conditions and trends and your options for your next home before jumping on the market.

6. Don’t Get Too Emotional

Your attachment to your house and your own financial needs

don’t really matter in the transaction.

If you can’t set them aside the sale won’t go as you’d like it to.

Remember – it was your home but to the buyer it’s as a house.

 

What Does The Closing Process Involve When I Sell?

As this video explains, a signed sales contract doesn’t mean your house is sold. There are still financial, contractual and legal steps for both sides.

The buyer has to get financing to meet the contract terms – which includes credit checks.

The property is inspected and appraised; title insurance and escrow accounts are set up while you locate new housing, pack and move. And take care of any obligations like painting or repairs. After the contract is signed, it can take a month or more of closing steps to reach the closing meeting.

So plan on that when you plan to sell.

What Is A Counter-Offer?

The video puts this in more visual terms, but basically, a seller can respond to a buyer’s offer with changes – a “counter” – that improves the terms.

You need to put yourself in their shoes and construct a modified offer that you think they might take that meets more of your needs. Then it’s their turn – accept, reject, or construct yet another counter.

It’s an efficient market process, but beware: clauses and costs matter. Your broker should be closely involved in constructing a counter. Successful bargaining is best done with a win/win approach where each side is meeting their biggest needs and compromising others to reach an agreement.

Remember that outside conditions like interest rates, and supply and demand, will keep evolving so you’ll need to be patient but decisive to craft an counter-offer that works for both sides.