The way people buy and sell homes is constantly changing, and in the last year Atlanta has seen tons of new “instant offer” players come into the market. Companies like OpenDoor, OfferPad, Knock, and even Zillow are buying homes. These instant offer websites ask sellers to provide some information about their home and receive their offer within a few days. Sounds painless and too good to be true, right?
I was recently able to get firsthand experience with two separate companies and their processes. If you’re considering selling your home to one of these instant offer companies, check out my list below of a few things I learned.
1. Expect a low offer
These companies intend to either make some updates to the home and sell it for a quick profit or rent it out. Because of this, you shouldn’t expect to see a strong offer. Expect a lower-than-market value offer (some companies offer all cash), with few special stipulations.
2. You will still pay fees
Instant offers aren’t a way to save money on commissions. In fact, in the two experiences I have had, the fees charged to the seller were MORE than if they went the traditional listing route and sold with an agent. One company charged 6% fee to the seller and another company a seller received an offer from charged an 8% fee to the seller. This means that combined with my commission, the seller fees totaled 9% total commission and 11% total commission.
3. You will not get the best price for your home
These offers are geared towards sellers who value speed and convenience over the highest final sales price. This can be a great option for people who are selling suddenly due to personal reasons, like a death or divorce, or with a hard deadline to sell. Put simply, for some it’s worth taking less money to ensure a quick closing.
4. The sale won’t necessarily be “as-is”
The company that purchased one of my listings completed a home inspection as a typical buyer would. Following the inspection, they requested additional concessions for repairs (several thousand dollars!), or gave my seller the option of completing the repairs. Since there was no emotional attachment to the home, the company purchasing would not negotiate on any of the repair items like a potential buyer might.
For some of my out-of-state sellers, we actually closed on the sale with the company that made the instant offer. I felt strongly I could have gotten them more money, but after a few weeks on the market they were starting to grow anxious at the prospect of paying another mortgage payment on a vacant home. The 2 week closing with minimal headache on their part was a major plus for them. They had a ton of equity in their home so missing out on a potential $5k-$10k more with a traditional buyer wasn’t worth the potential stress and uncertainty to them.
For my local sellers who were up against a hard deadline (a new construction home they were purchasing was nearing completion and they needed to sell their current home to buy the new one) the instant offer was not as appealing to them. We received the instant offer while negotiating an offer from a traditional buyer. While the offer number on the instant offer was higher than our other offer, with the company’s fees + my commission, the total net was much less than our other offer. Our other offer agreed to purchase the home “as-is” which was appealing to my clients. From my previous experience, I am certain that had we accepted the instant offer there would have been some additional concessions requested. It did, however, give my sellers some comfort knowing that WORST CASE SCENARIO they had this to fall back on in the event our primary buyer did not work out.
Wondering if one of these “instant offers” is for you? I recommend you take the time to speak to a professional agent and get a market analysis. Perhaps homes in your area are selling quickly anyway. Perhaps your home is worth much more than you think. Perhaps it’s worth much less. The right agent can help guide you to help you achieve your real estate goals.
We list homes all over the Atlanta metro-area. If you are interested in receiving a market analysis, or wondering what your options are for selling your home, email us at Blair@BlairSells.com