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If you're primed to move to your next house but are less enthused for the hassle and uncertainty of selling a home, selling to an iBuyer may be an option.
Though iBuyers aren’t yet in every market, their ability to provide a nearly instant offer for your home is rapidly spreading. Intrigued by the idea of a less stressful home sale? Here's what you should know about selling real estate to an iBuyer.
» MORE: What is an iBuyer?
How selling to an iBuyer works
Though there's some variation among iBuyers, for most the process involves a few basic steps. Here's a quick breakdown of each one.
1. Request an offer
Start by entering information about your home on the iBuyer's website. Your address is used to confirm whether your property is within one of the iBuyer's markets. Then, fill in pertinent details, like any renovations or upgrades you've done.
Depending on the iBuyer, you'll generally receive an offer within a few days — the "i" may stand for "instant," but "fast" would be more accurate. In most cases, you'll also receive a phone call from an iBuyer representative, who will go over the offer with you and answer any questions you have.
The offer will include the fee you'll pay the iBuyer for the service it's providing. Service fees can range from 5% to 12% of the total cost, depending on variables like the iBuyer you choose (some claim to cap fees at a certain percentage), your market, the time of year and the home itself.
Amanda Pendleton, communications manager for Zillow Offers, says that these fees are used to cover things like holding costs, keeping the utilities on while the home is on the market, HOA dues that come up, and property taxes that need to be paid.
Your offer may also include a cost estimate for repairs needed to put your home on the market, though you probably won't get a real number on that until after the property is evaluated by a real person.
2. Get an assessment
Once you agree to the offer, the next step is to schedule a home assessment. This is not the same as a home inspection. An employee or contractor for the iBuyer will come to your home and take photos inside and out to document its condition. You'll then receive an itemized list of any repairs that need to be completed.
"Any repairs [or] defects that we find during the assessment, we request a credit from the seller," says Tyler Hixson, director of real estate partnerships and strategy at Opendoor. "Once they have moved out, we make the repairs." In this case, credit means a reduction in the offer equivalent to the estimated cost of the repairs. Though sellers can choose to complete repairs themselves rather than credit the iBuyer, this can slow down the transaction (a minus if you're going for speed).
» MORE: Ways to sell your house fast
3. Close and move
After repair issues are sorted out, all that's left is closing. You'll likely still pay some closing costs, just as you would with a traditional sale. A key difference is that many iBuyers let you choose your closing date, with some offering up to a 90-day window — a major plus if you’re still hunting for your next home.
Some iBuyers offer additional perks to make moving easier. For example, Opendoor lets sellers rent their homes for up to 21 days after closing. Offerpad will pay for movers if you're staying within 50 miles of the home you sold to it. But for the most part, once your stuff is out and you've closed on the home, you simply walk away with a check.
Deciding if an iBuyer is right for you
There are definitely scenarios where selling to an iBuyer could save you stress and uncertainty. Say you're planning a major move and have a specific timeline, or you simply don't want to disrupt your day-to-day for showings. The ability to set your closing date can also help you avoid having to pay two mortgages if you've got overlap or find temporary digs if there's a gap. But be aware that you will pay for this convenience and flexibility in the form of iBuyer service fees.