Somebody sends me a screenshot almost every week, an offer on their house from one of the big house buying websites, and they ask the same question in the same tone. Is this what you do? The honest answer is no, and the interesting part is why not.
So let us talk about iBuyers, the companies that will make you an offer on your house from a laptop. Where they fit, where they do not, and the one thing the model cannot see no matter how good the software gets.
WHAT AN IBUYER ACTUALLY IS, IN PLAIN WORDS
An iBuyer is a large company that buys houses directly, prices them with a computer model instead of a person walking through, and then resells them. You put in your address, answer a page of questions, and a number comes back. If you take it, they send somebody to look, you pick a closing date, and that is the transaction.
The selling point is that it is tidy. No sign in the yard, no strangers walking through on a Saturday, no repair list handed to you by a buyer’s inspector. A number, a date, and a wire.
THE PART THEY GET RIGHT, AND IT IS NOT NOTHING
I am not going to stand here and tell you the model is a trick, because for some sellers it genuinely works. If the house is a fairly standard one in a subdivision, built in an era the system has already seen a thousand of, and you want the whole thing over with, an iBuyer can be a clean way to do it.
Certainty has value, and it is easy to forget that while you are staring at the top of the range. A timeline you can plan around, a buyer who will not lose their loan, and nobody asking you to paint anything. That is real, and a comparison that pretends otherwise is not being straight with you.
WHERE THE VENDING MACHINE COMPARISON BREAKS DOWN
The way I picture the model is a vending machine. You want lunch, you do not want to talk to anyone, and the machine hands you a sealed bag of chips at a price you did not negotiate. Fast, predictable, and it has no opinion about your day.
Now let me check that picture, because it only goes so far. A vending machine sells a row of identical bags. Every bag in it is the same as the last one, which is why the machine never has to look at yours before it decides. A house is the opposite. There is one of yours, with its own age, its own roof, and its own rooms somebody added later.
That is why even the slickest version of this model still sends a person out to walk the property before the number is final. The software sets the range. A human confirms it, and that human can come back and say no, or drop the figure after seeing it.
So the machine is not really selling you a price. It is selling you a fast first guess, and then it does an inspection like everybody else. That is the part the metaphor leaves out, and it is the part that decides your actual number.
THE FEE IS THE PRICE OF THE CONVENIENCE, SO ASK TO SEE IT IN WRITING
An iBuyer is a business. It makes money on the spread between what it pays you and what it later sells for, and in most versions of the model it also charges a service fee, which comes out as a percentage of the price rather than a flat amount.
That fee is what you pay to remove the showings, the waiting and the uncertainty, and there is nothing wrong with buying that, once you know what you are buying. What goes sideways is when a seller sets that number next to a listing’s asking price and treats the two as the same kind of number. One is what you keep. The other is what you hoped a stranger would pay. The gap between them is where all the real money lives.
So ask for the fee in writing, ask what else comes off the final figure, and ask what happens to the number if the walk through turns up something. Those answers are usually fine. It is the not asking that costs people.
A LOCAL CASH BUYER IS NOT A SMALLER IBUYER
People hear that I buy houses and assume I am a small version of one of those websites. I understand the assumption, but it points the wrong way.
A local buyer is a person who stands in your kitchen and looks at the same things you look at, and who can say yes to a house that a model would decline on the way in. The trade runs both directions, so let me say my half plainly. I do not have a national brand or a fleet of vans, and I am a smaller operation than a company with a marketing department. What you get instead is somebody who can see an odd house on an odd street and price the odd part instead of skipping the file.
HOW TO COMPARE THE THREE WITHOUT GETTING SOLD TO
You are really choosing among three routes, and each trades something different. A listing usually nets the most when the house shows well and you have months to spend, and that route is at open market listing. An iBuyer buys speed and certainty and charges you for both. A local buyer trades a lower number for condition, timing, and a conversation with the person deciding, which is roughly what a cash offer looks like.
- What every fee adds up to, not just the one on the first page.
- What comes off the number after the property is walked.
- How firm the closing date is, and what happens if it slips.
- Whether the offer comes from the company itself, or from somebody it plans to hand the contract to.
If you want the same comparison against a straight listing, I worked that one out at comparing a cash offer to a listing. Going it alone is covered at cash offer versus selling it yourself. And if the whole thing left you wondering who is really on the other end of an offer, this one is worth ten minutes.
Anyway, thanks for being here. If you are staring at one of those screenshots with a number on it and no way to tell whether it is good, here is how the process works on my side, and you can tell me about the house whenever you want. There is no version of that where you owe me anything.
Question for you: has a company ever made you an offer on a house you were not even thinking about selling?
