If you are looking for a quick, hassle-free closing on the date of your choice in exchange for netting less profit on the sale of your home, contacting an an iBuyer (short for instant buyer) like Offer Pad or Open Door to request an offer may be a good option for you.
Are Offer Pad and Open Door Legitimate:
Yes these companies are legitimate. You can request an offer from an iBuyer like Offer Pad or Open Door through their websites. They should get back to you with a preliminary offer within a day or two. If you accept the price they are offering, they will come out to inspect your home.
They will only make offers on homes in good condition. If you have a fixer upper, you won’t be able to use this option. The cost of any repairs they deem necessary will be deducted from the offer price and they will take care of the repairs after the closing. The closing process can take from 14 – 45 days.
Are Offer Pad and Open Door fees expensive?
In Florida, the seller pays the real estate commissions. When selling your home the traditional way with a Realtor, the normal commission is 6%, with the listing agent receiving 3% and the buyer’s agent the other 3%. I will list it for less at 4.5% with 3% of this given to buyer’s agent.
The iBuyers do not charge a commission, but instead Offer Pad and Open Door charge a service fee of 7.5%. Zillow is now getting in the iBuyer game with total fees of 8.5%. Whichever iBuyer you use, you will still need to pay the typical seller closing costs such as title insurance and doc stamps.
You can expect to net less on the sale of your Central Florida home if you go this route since their fees of 7.5% – 8.5% are higher than my 4.5% listing fee. Also, they will likely offer you a lower price for your home than you could expect to get if your home were listed on the MLS with competing buyers.
Word of caution regarding iBuyer comparisons:
The iBuyers sometimes show you a comparison of what you will net if you sell to them rather than listing with a Realtor on the MLS. They often include a line for seller concessions – a percentage of the sales price given to the buyer to help with closing costs. They do this so that the side by side comparison shows them netting you more money.
You are not required to contribute any of your proceeds to help with the buyer closing costs. This is just an optional negotiating tool. Therefore when you make the comparison, remove this line so that you are comparing Apples to Apples and you will see that you are actually netting less money using an iBuyer.
Consider options other than iBuyers:
I encourage you to shop around and get offers from iBuyers. Then compare it to what you could net if you listed it with me for 4.5% – much less than the 7.5% fees the iBuyers charge and also less than the traditional 6% Realtor commission.
I could also make you a cash offer on your home like the iBuyers are doing.