It seems like there is a new and improved real estate gimmick weekly, if not daily. Every time you turn on the TV, listen to the radio, there they are. They are offering no showings, an incredible commission, close when you want. Let's discuss the reality. These Ibuyer's can in fact buy your home and close when you want. They do it by buying your home at wholesale pricing. What does wholesale mean for you? Less than market value. You see, they have to be able to sell it at market rate as soon as possible! In addition, you can pay up to 8.5%-9% in customer experience fees. I recently ran a report in San Tan Valley specifically looking at Open Door and Offerpad. The report showed that these companies turned these properties, and grossed approximately $14,000.00 per home (feel free to call for a copy of the report). They did this in just weeks, or a couple of months. WHY shouldn't you benefit from an additional $14,000.00?
Let's talk incredibly low "listing fees". These companies try to WOW you with low, low rates. Let me put this out there...I generally charge 6% to completely list and sell your home. My company gives half of that (3% - Co-Broke) to the Buyer's Broker. Seller's pay for both Agents, and we need to offer a "co-broker" (commission) to place your listing on the MLS. I feel that Buyer Brokers work hard, and have earned every penny of the co-broke. Well, these low ball companies neglect to tell you this. They lead you believe that their INCREDIBLE rate is all you will pay! Now, I have offered discounts on my listing fee (I generally charge 3%). If I do that, I take it off my listing fee, NOT the Buyer's Agent co-broke. So, let's do some math...If we list your house and I offer 50% off my listing fee that equals 1.5%. Does anyone remember who else we have to pay? There is that pesky Buyer's Broker co-broker of 3% (my company policy). So, in reality the total to list & sell in this scenario is 4.5%. Is that what these companies are advertising? NO, because you might not call them if they told you the whole truth.
The most recent trend, companies that try to have Buyer's buy DIRECTLY from them. That's right, no Buyer representation. FYI...Buyer's don't generally pay for real estate services. WHY...WHY would you give up being represented by a professional? When I represent Buyer's, my primary goal is to protect the Buyer's interests. I negotiate for the buyer, and act as an impartial third party. My obligation is to point out facts (good and bad) to help Buyer's make the best decisions. If you give up that right, who is looking out for you?
Real Estate is complicated, and to do it right takes training, experience and skill! If everyone could do it right, everyone would be doing it. My advice...ask questions, don't just hire anyone. Don't fall for the latest gimmick, because it might just COST YOU!