The True Cost of iBuying

What Is iBuying?

You’ve likely heard of iBuying, but might not know what it means. Let’s break it down.

iBuyer companies operate like house flippers. They are similar to the "we pay cash" outfits. They buy homes below market value and then resell them for a profit. They can make an offer in minutes without even seeing your home. If you accept, you can close within days. Sounds great, right? But is it really?

The Numbers: Is It Worth It?

Imagine you bought your home for $300,000 and put 20% down, giving you $60,000 in equity. Then, suddenly, you need to move for work and sell your home fast. You decide to check out iBuying or a "we pay cash" investor.

Your home is still worth $300,000. An iBuyer offers you $285,000, a 5% discount. Right away, you lose $15,000. iBuyers also charge around 5% in fees, costing you another $15,000. In total, that’s $30,000 gone—half your equity. This is a steep price to pay for a fast sale compared to selling on the open market.

The Real Costs of iBuying

iBuyer transaction costs usually range between 7-13% of the home’s sale price. Many iBuyers also deduct money for repairs. These companies focus on their profit, not yours, and will always offer below Fair Market Value (FMV). You won’t have representation in the deal, unlike when working with a REALTOR®.

Why Choose a REALTOR® Instead?

A REALTOR® will list your home at or above FMV. They work in your best interest and are skilled negotiators. Unlike iBuying companies and cash investors, REALTORS® help you get the best possible price for your home while guiding you through complex transactions.

Final Thoughts

Before jumping into an iBuying or "we pay cash" deal, consider the true costs. If you're thinking of selling or buying, reach out to us. We’d love to help!