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Real Estate Insights from Real Estate Insiders

Are iBuyers a Good Thing or a Bad Thing?

IBuyer is a new data-driven method of buying or selling a house quickly or making investments in the real estate sector without much physical inspection of the property. Compared to the conventional ways of selling a house, iBuyer is much more convenient for homeowners as they are not required to clean and prepare their house, stage it before the potential buyers and wait endlessly for a buyer to go for the deal. However, there have also been concerns floating in the air whether iBuyer is worth the hype it has been creating.

Convenience Vs Profit

There is no denying that iBuyer makes the process of home-selling simple and convenient, especially in comparison to what involves home selling the house through a traditional realtor. But there are a few drawbacks as well in the iBuying process that home-sellers must take into account before choosing this digital medium to sell their homes. The foremost thing to keep in mind is that iBuyer entities are companies working for a profit and the various industry data shows that home-sellers have mostly netted less than the market value of their properties in the open market.

IBuyer Vs Traditional Realtor

The iBuyer transaction begins with the analysis of available sales data of the area where the home on sale is located. This is not much different from how a realtor would arrive at the price for a home. But the difference between the two ways of buying a house is that the iBuyer makes its initial offering without having seen the property and, therefore, can make offers for as many homes as there are in the market. Since the traditional realtor would check the homes individually before making offers to potential clients, it’s a time-consuming process and has serious scaling issues.

The iBuyer companies make use of sales data and computer software to calculate the price of a home that it is ready to offer to a home-seller. In most cases, the price offered by an iBuyer company is less than the market value of the property. According to organizations that keep a tab on the real estate market, the convenience that iBuyer companies offer to home sellers comes at a cost. In many cases, the companies ask for a convenience fee that is in the range of 5.5-10% . This is over and above the price which is already heavily discounted. The market watch agencies put the loss of the iBuyer home sellers at 11% compared to those who prefer the conventional style of realtor-based home selling in the open market.

Although iBuyer companies make their initial offer within 48 hours for a property enrolled with them for sale, they do carry out inspection and take into account the condition of the property before sealing the deal. The final deal is contingent on the condition and inspection report of the home. The final price of the house can change from the initial offering as the iBuyer company may like to have a renegotiation around any issue found in the house. Many user reviews complain that iBuyer companies insist for renegotiation on the price that they had offered initially. Though this is not much different from a house-selling experience encountered in traditional realtor-based transactions, the fact that iBuyer companies get into renegotiation on an already discounted price makes it a less attractive option compared to the conventional ways of house-selling.

However, iBuyers are a great option for those who prefer convenience over price or profit. There is no denying that through iBuying, a home-owner would be able to sell his house more easily and quickly. If that is your objective, this is the surely the way to go to. But if you are looking to book a profit by selling your home at the most competitive price, perhaps your old realtor can be a better choice.

iBuyer: Pros & Cons

The two distinct advantages of iBuyer are the speed and convenience. It spares the home sellers the trouble of cleaning and preparing the house for staging and marketing. It makes sure that the deal is closed at the soonest because there is no dilly-dallying of the buyer or there is no lengthy process of loan underwriting. It allows the home-seller to close the transaction quickly and move on with their lives. This kind of property transaction is more suitable for those who urgently need to relocate and don’t have the time to go through a lengthy process of selling their homes in the open market, which can easily take weeks or months for the transaction to take place.

By choosing the option of iBuyer, the home-seller can also save money that he may have to pay to the real estate agent who facilitates the sales. Usually, the agent’s commission is in the region of 6% on the overall transaction cost. This can be a hefty sum of money if your property is located in some expense property markets.

However, iBuyer companies are in the market for profit and they make their profit by buying the homes at a discounted price and selling it to investors or in the open marketing at a huge profit after carrying out necessary sprucing up and makeover of the house. The iBuyer buys the house sufficiently cheaper to ensure high rate of return on their profit. This means the home-seller gets less than the market price for their profit.


  • No preparation of the house required
  • No cleaning, staging or marketing
  • Quick sales without paying a commission to the agent
  • Technology-based


  • Lower price & profit
  • Little human interface
  • Still not available everywhere
  • iBuyers are selective about what the buy

Final Thoughts

IBuyer is a novel concept that takes out human interface from real estate deals. It offers the homeowners the peace and convenience of quick transactions for their properties. IBuyer companies offer instant cash offers to buy homes, making it easier for the home-sellers to make their future decisions. In case of an urgent relocation, the biggest concern a homeowner would have is to redeem his investment from the house and take an independent call about a future house. The iBuyer promises an early closing of the deal. However, there are some drawbacks of the system and the most important of them is that it offers a price which is considerably lower than the market value of the property. Also, it does not offer to buy all kinds of property, nor is it available in all property markets.