Many home sellers wish to sell their houses quickly and want cash in return. These sellers can sell their properties to either iBuyers and get their house off the market fast or they can opt for companies that buy houses for cash.
If you are wondering how the two are different, this guide will help you understand the difference.
IBuyers vs. Cash Companies: The Difference
IBuyer or an instant buyer leverages its advanced technology and algorithm to determine the market value of a property. These are real estate agents or investors who want easy-to-sell properties that are in a good condition. In most cases, they will undertake minimal repairs to ensure the functionality and safety of the home before they proceed with finding the next buyer for it.
When selling a house to an iBuyer, sellers can receive cash offers in as little as 24 hours, minus the hassle of staging and showing.
Besides buying homes, iBuyer can also sell properties. However, they might not be present in your neighborhood. iBuyers form a very minuscule part of the overall real estate industry. In the third quarter of 2021, they accounted for only 1.6% of all home sales in the US.
As per past reviews, iBuyers buy homes at lower prices and sell them at higher rates.
On the other hand, companies that buy houses for cash purchase homes in their as-is condition. If you want to get your property quickly off the market, opting for a cash buyer results in a hassle-free process as you don’t have to renovate the property.
Real estate statistics show that nearly one-third of the homes bought in the first six months of 2021 were cash sales.
Cash buyers are quite common in the US real estate market. They are usually brokerages, families, or individuals who have sold a property previously and have the cash to buy another one outright.
As a seller, your primary goal is to make as much money as possible from the home sale. But there are many homeowners who just want to make a quick sale, get a decent price, and be done with the whole process.
The time factor is a major benefit of all-cash transactions. So, when a buyer can pay cash, the whole process of going through the financial process, is simplified. Companies that buy houses for cash usually close the deal in some weeks rather than taking months.
Top iBuyers
Based on the transaction volume, Offerpad and Opendoor are the biggest iBuyers. In the third quarter of 2021, Offerpad reported over 2,700 home purchases and nearly 1,600 home sales. Opendoor reported more than 15,000 home purchases and nearly 6,000 home sales in the same period.
Offerpad provides the certainty of a cash offer and a quick closing on the date chosen by the seller. Most Offerpad reviews are positive and point towards its great customer service. Past customers were particularly impressed with the accessibility of its representatives and how it helped to talk to an actual human rather than an automated system.
Offerpad reviews also suggested that the company worked just as marketed, providing a hassle-free selling experience. But there have been complaints about the final offer being significantly less than the initial one.
Opendoor is also a good choice for sellers who want a quick, predictable sale. While the price offered could be slightly less than the value of comparable properties, the difference may be worth it for sellers who prefer speed and convenience.
The majority of Opendoor reviews are positive and appreciate the quick, seamless transaction. The negative ones focus on inflated repair costs and the inability to negotiate.
Top companies that buy houses for cash
We Buy Ugly Houses has a better name than most individual cash buyers. Nonetheless, sellers’ experiences can differ based on the quality of their local franchise. While the company can close in as little as three weeks, it is a known fact that their payment is far less than the fair market value.
We Buy Houses is another cash buyer and working with it is more likely to be positive than dealing with a local private investor. The company vets all of its investors and provides them an exclusive license to function in their territory. Thus, investors have an incentive to work hard to maintain their edge. While this cash-buying company does not have control over the offer made by its investors, they do have the authority to rescind licenses if investors fail to meet its standards.
Bottom Line
If you wish to avoid selling your house through a traditional realtor, you may want to consider the option of companies that buy houses for cash or an iBuyer. This is especially beneficial if you want a quick and convenient sale because traditional home sales might take months to close. However, the convenience and speed come at a price, which is a lower sale price.
