The PJG iBuyer Consultant program is a service we provide to help PROTECT your hard-earned equity. I want to first say I don't believe iBuyer is bad for the customer, the agent or the industry. I do believe too many people are using the program for the wrong reasons and not getting proper advice. Here is an unbiased Forbes article explaining the process.Whether you're buying or selling, your equity should be extremely important to you. I'm convinced based on my research and over 20 years of experience helping my clients MAXIMIZE their equity we can give you good advice on your situation. Regardless, we can refer you to an iBuyer service if you so choose, but we want to make sure you understand how it works then advise you accordingly. They aren't all equal but that does require a one on one discussion.
Here are the most important questions and points you need to understand...
- What do you know about the various iBuyer programs? It's important to know there are several iBuyer programs out there but ultimately their goal is to make a profit like any other sustainable business model. They purchase your home at a discount in order to resale for a profit while tacking "fees" on the backend to ensure a return to their investors. Some are far more generous than others but the motive is the same... Profit! Convenience isn't free!
- Did you know (by far) most iBuyer offers are based on an algorithm? Yes...It's a fact. Unless you live in an extremely cookie cutter area it's near impossible to accurately price on a home by an algorithm. It's simply a guide but pricing homes properly requires seasoned experts. We have many examples of recorded sales from these programs far less than what we could've sold the same homes for and that wasn't included in their fees (Fees usually run from 7 to 10% on top over less than market value offer). Zillow, for example, has an algorithm called "Zestimate", have you ever seen the ZestAccuracy reports? In Wake County(6/01/19) based on their own data, 76% of the time they're within 5% accuracy, 88% they're within 10% and 91.4% within 20%. So 24% of their time they are off by more than 5%! Wake County is much better than most areas in the USA! Consider this...If they're 3% off on the price you may have just paid for a huge portion of your commission with PJG not counting their offer is already lower than market plus their fees.
- Did you know they will do a home inspection? This could lead to a price adjustment when you could've negotiated those repairs with your buyer and often sold "as is" or with a minor repair cost. (see below for example)
- Many big box national firms will start offering similar iBuyer programs soon knowing once you see the numbers broken down you'll go the traditional route...why is this a good idea? Knowledge is power.
You can see in this example a home sold for $211,100 that showed a net loss of $5,400 simply for convenience. For a $200,000 home that's a lot to leave on the table. This price range in Raleigh is extremely competitive and predictable. That's why iBuyers companies are coming into this area! What could a homeowner do with over 5k of additional money? That could help on your next down payment, a new fence, or pay off a car! In this case, the Opendoor fee was only 5.6% which is low in a lot of cases.
NOTE: When you look at public records the purchase price from an iBuyer doesn't reflect the fees charged which can be higher than 10%!
IMPORTANTIs convenience the main reason for considering such a program? Usually, convenience is the ONLY reason but please consider the MANY factors that come into play when "convenience" is the driving force. THREE POINTS TO CONSIDER...
- You lose the ability to test the market. iBuyer companies are smart...They targeted certain markets for a reason. The price points, home characteristics, and locations are always considered in any iBuyer Program, which typically are the ones that sell the fastest and often could result in MULTIPLE OFFERS. We recently sold a 140k TH for 10k over asking price with multiple offers. We sold an inside beltline home for a record cost per sf and NO iBuyer program would've touched it.
- If multiple offers come into play, higher due diligence nonrefundable money is usually in play which brings more leverage to the seller, allowing for better negotiating in repairs (if any at all). Often they will purchase "as is"!
- Closing convenience! Rarely in a low inventory market are buyers not willing to accommodate your closing date, along with a large due diligence sum the closing is more than likely going to happen, ensuring you a smooth transition to your new home. The potential savings of thousands could do wonders in providing you the ability to plan for your next move.
EXAMPLE: In doing research I've seen a transaction where an iBuyer company purchased an unlisted home for $248,000 (not counting closing fees and possible repair concessions) put the home back up for $265,000 and in the same month and neighborhood, a similar(but 300 sf smaller) home was listed for $250,000 and sold for $260,000 by a traditional broker in 3 days.
What can we do to help?
- As licensed REALTORS our #1 priority is your best interest. As iBuyer Consultants, we can help advise you through your iBuying options or maybe convince you to list with us hopefully seeing the advantages of our professional services with decades of experience.
- We might already have a buyer ready to make an offer! Through my network of agents, maybe even cash!
- If you cannot show the home easily we have solutions. Do you have pets, or a baby or an elderly parent and dread dealing with the process? We have solutions!
- Does the home need cleaning, organizing, painting, staging or a complete remodel? We have solutions! We have a long list of vetted vendors waiting to help.
- We can offer a short term listing agreement(one of several plans) and an aggressive commission structured based on many criteria and the plan you choose. Are you purchasing another home? Are you a past client? Are you a referral from a past client? Can we get a referral from an agent outside of the area you're relocating to? We are fair and provide nothing but a 5-star service!