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How much do cash buyers offer?
Many house-flipping companies abide by the 70% rule, meaning they’ll offer 70% of your home’s after-repair value (ARV) and then deduct the cost of repairs. iBuyers pay closer to 85% to 95% of a home’s market value and typically charge fees of 5% to 6% of the home’s sale price.
While a 5% to 6% fee might sound similar to what you’d pay a real estate agent, and the 70% rule appears reasonable for a house that requires repairs, some companies add extra service or convenience fees that may bump the total up to 15%. Those extra costs can sneak up on you and cut into your bottom line more than you’d expect.
On top of that, many house-buying firms use automated tools to make their initial offer, which means it’s based on limited info and can change after they inspect your home. It’s not necessarily shady, it just might not match what you were hoping for. That’s why it’s worth performing due diligence: read the fine print, ask questions, especially about hidden costs, and compare companies so you know exactly what you’re signing up for.
How do instant offers in real estate work?
Securing an instant offer real estate deal is a simple and efficient way to sell your home quickly. The process is fairly simple, with these steps involved:
Request an offer by providing details about your home
First, request a no-obligation offer on the company’s website by entering your address and answering a few questions about your home. With HomeLight’s Simple Sale platform, clients are matched with cash offers that allow them to sell in days, not months.
Henderson has worked with clients using HomeLight’s Simple Sale platform and praises it for its “simplicity” and “straightforwardness.” Sellers are not hit by surprise credits or repair contingencies by buyers when using HomeLight’s Simple Sale. Henderson also likes that there are no additional fees. “Once an offer is accepted, the seller knows that’s what they’re going to get,” he adds.
Receive an offer
Generally, you can expect an offer within a few days. Some companies may respond within 24 to 48 hours. Review and respond to an offer. The offer will typically include the offer price, seller closing costs (if applicable), and transaction fees.
Henderson warns that sellers should not necessarily take the first offer that comes their way. Instead, they should compare multiple offers.
“I always feel that anybody [who] is thinking about selling, even if they’re selling to an investor or iBuyer, should still be consulting with an agent just to evaluate,” Henderson says.
This is so that agents can act as guides and help sellers evaluate their options and choose the best solution for their situation.
Typically, negotiation is reduced or eliminated with instant offer real estate deals. However, Henderson states that agents are great for determining whether there is any room for negotiation in the contract. Agents can then engage in those discussions with potential buyers on behalf of their clients.
After you receive an offer that you feel comfortable with, look closely at your instant offer terms before you accept, advises Cyndie Gawain, a Dallas agent with more than 20 years of experience. For example, iBuyer companies may have a maximum number of leaseback days that may not work within your desired timeframe.
Schedule a home assessment and review any repair adjustments
If you accept an instant offer, you’ll typically schedule an in-home assessment with the company. The inspector will verify the home’s condition and identify any necessary repairs. If repairs are needed, the buyer creates a cost estimate and deducts the amount from your offer as a seller credit.
Choose a closing date that works for you
You should choose an offer that works with your moving timeline. Investors and house-buying companies typically provide flexible closing options. In the case of Simple Sale, once you have accepted your cash offer and chosen your move-out date, HomeLight will send your payment within 7 days.
