I recently had a seller client phone to say she had received a solicition from an iBuyer (internet Buyer) that wanted to bid on her house.
I contacted the iBuyer and they decided not to make an offer. The reason was inane and innocuous. I am guessing the seller asking price was to high.
iBuyers advertise nationally to buy your house quick.
The main iBuyers are
Offerpad
OpenDoor
Knock
Zillow Instant Offers
Redfin Now
I am told they buy 10% of the homes sold. That seems like millions of homes worth Billions and Billions.
They exist to help consumers avoid pain of the real estate process. They will offer to buy a home with a desktop appraisal and no inspection and no licensed appraiser inside your home. It will happen quick.
Several people have argued about the reality of getting a fair price. This seems vague to me, but it has been written that it might cost the seller an additional 1% to use an iBuyer.
It depends on opinion as to whether the buyer got a good price. Ask ten people the value and get ten different answers.
Some agents might comments that iBuyers offer 7 to 12 % below the market value. Thus the seller nets less than using a traditional broker for 6% sales commission.
The iBuyer also uses a discount broker or an employee to sell the property.
The argument is that …… even if the iBuyer sometimes loses money on a transaction ….. they do so many transactions that they do make money …. To off set an occasional loss.
iBuyers are involved in one out of 10 of residential home transactions. Hard for me to believe.
The reason for this disruption is
In summary, iBuyers help to avoid pain of the real estate process.
I started this podcast about Snakes Landmines and Grassfire because I have seen the pains of the process which are caused by changing personnel, institutional policies, guidelines, bureaucratic rules and laws.
I suggest that experience can foresee some problems which can be averted by just avoiding some buyers or writing a contract to prevent the future possible problem …. To transfer the pain to the other side of the transaction.
Have 49,000 hours of transaction experience to avoid the rocks that hide snakes or just kill the snake.
Certainly, there is one problem can only be cured by time and pain. That problem is caused by client unrealistic expections.
Sellers normally want a sales price that is not possible today …. But Maybe later possible with years of price inflation. They often choose a broker that will promises a higher price, only to be disappointed later and then reduce the price to a reasonable price.
Then the seller has more time to again realize that another price reduction is necessary. Sellers frequently blame it on the broker and find another broker that will price the blue sky.
I mention that the issue is NOT price ….
The first question to ask is “When do you want the money?”. Then set the sales price.
Buyers want to find a good deal at wholesale, however sellers price at unrealistic retail prices. The buyers should look for properties to add better management and add features to increase property value.
It helps to have the experience as a Senior Property Tax Consultant to know to how to determine value of thousands of property.
It is good to know Appraisal Theory and the 3 methods to derive value.
The comparable approach, reproduction approach and the Income approach. Be sure to ask for our online digital app which can help you calculate your property value today, using the income approach. It is easy to understand and use. Use it on your desktop or your phone.
Certainly, most snakes can be avoided by writing the snakes out of the contract. Most agents know how to fill in the blanks on the contract, but most agents do not know which blanks and boxes to be careful.
I am not a lawyer nor do I add legal clauses to promulgated forms, however I can suggest caution in certain contractual situations and mention solutions.
Sometimes snakes appear after the contract is written. Several years ago, I was helping a client to sell a 45 unit multifamily property in very poor condition and one 5 foot corner was overlapped on the land parcel next to it.
Fortunately, I had helped the seller to pick a competent escrow title company which found a letter from a distant past owner which allowed the encroachment .
Sometimes only God has control due to tragedies like death and disease and natural disasters. Then my experience helps to remedy and salvage a transaction.
On a more positive note, we should talk to discuss your concerns.
Prepare for the unknown.
We reveal the Not Obvious.
There are often unusual or unexpected problems.
What are the underlying main issues?
You should ask revealing questions and find the true answers.
Who, What, Where, When and How ??
We know what to do and we enjoy helping people.
Phone us at 281 236 8189 to discuss real estate.
Go to our website at Houstonius.com.
Visit us at the Poodle Ranch.