If you've never heard the term "iBuyers," you're not alone. This latest real estate trend is gaining traction, with billions of dollars of investment since 2014. Even large companies like Zillow have recently entered the space. The term is short for "internet buyer" or "instant buyer" and attempts to make selling and buying homes much more intuitive and straightforward for people by introducing an automated, tech-first approach to the real estate business.

However, selling to an iBuyer is not always the best move. Usually, there are other ways to sell your home that result in a better deal. To understand why that's the case, let's explore the iBuyer concept in more detail.

How Do iBuyers Work?

iBuyers are companies that make cash offers on properties. The process is usually pretty standard across all companies. First, you'll submit some information about your house. Typically, you'll need the address, details about its condition, and maybe some info on any upgrades you've put into it.

An "automated valuation model" then usually does a preliminary assessment of your home to see if it might match the company's criteria. For example, perhaps the company only buys houses in California with property values below $1 million. If this algorithm suspects that your home falls within this range and geographic area, you'll typically get an all-cash offer.

If the offer sounds reasonable, you can tentatively accept it. The company will then send out a home inspector to take a look at your property. Depending on its condition, the iBuyer may revise the offer downward. After the inspection, you'll receive the final, firm all-cash offer.

If you still accept the offer, the company arranges a relatively fast closing - often in as little as one week!

What Are the Benefits that iBuyers Provide to Clients?

These companies advertise many benefits to the seller. For example, they often talk about not having any agents' fees (compared with the typical 5-6% that you'd pay with traditional real estate agents). They also frequently emphasize speed. With many iBuyers, the timeframe from the date you contact them to the date you close can be as little as a week or two.

There are some situations where this is beneficial. If you're starting a new job and need to leave your house ASAP, an iBuyer might be the right choice. If you have significant repairs and don't have the funds to make them, you may have to accept what an iBuyer can give you and put that money towards a brand new home. There are some situations - mostly when speed is of the utmost importance - where iBuyers are genuinely beneficial.

All Is Not Rosy

The issue with iBuyers is that these companies have predicated their entire business model upon giving existing homeowners a lousy deal overall.

Those commissions that you're supposedly avoiding are often billed as service fees instead. Opendoor has a "service charge" that starts at 5%. However, Opendoor says that sellers pay, on average, 10-12% in fees! Additionally, offers tend to be about 5-10% below market value.

Most iBuyers charge sellers for any repairs that need to happen to the property to make it sellable. So, if one of these companies decides the home needs the kitchen remodeled for $10,000 to sell on the market, they'll deduct that $10,000 from your offer. But, you won't get an increased sales price for that upgrade. In other words, you pay the expenses - the iBuyer keeps the profits!

Indeed, studies have shown that iBuyers do not present excellent value for clients and often result in offers lower than what they'd get on the market. You're paying for convenience and speed, effectively.

These are just a few of the issues with iBuyers. When Yelp hides the review page of one of the biggest iBuyers in the industry (which has three stars, by the way), you know that there are issues with the business model!

There Is a Better Way!

Despite the business model's flaws, iBuyers are tapping into a genuine frustration that home sellers have. Although technology has advanced significantly, the home buying process can still feel dated. There's a lot of human interaction (which is especially problematic amid COVID), as well as a lot of uncertainty and anxiety. Much like ordering food from an app, many buyers - especially younger ones - like the thought of selling quickly and efficiently through a website or app, rather than going through the conventional real estate process.

The good news is that you can streamline that process - all while paying less in commissions and fees than those choosing traditional agents or iBuyers. SimpleShowing saves sellers an average of $7,500 on each transaction, primarily due to sellers paying 1-4% in commissions instead of the more traditional 6%.

SimpleShowing combines innovative technology with a streamlined sales approach. For example, self-tour lockboxes can eliminate all but the 1% commission to SimpleShowing. Verified buyers can download the app and request a code to unlock the home (of course, you're still in complete control of when people can and cannot come into your property). These verified buyers can look at your home with just a seller's agent. That means you'll save the 3% buyer's agent commission!

These smart, intelligent innovations combine the best of both worlds. You'll receive higher offers, pay less in fees, and have a technically streamlined solution that will make the process a breeze.

Instead of iBuyers, Consider Other Alternatives

iBuyers will not give you the best deal. They're in the business to make a profit, which means that they'll seek to provide you with the lowest offer possible to maximize their profits. There's no standard formula, but you'll likely receive at least 10-20% less, after all of the charges, than if you sold with a traditional real estate agent.

By using SimpleShowing, not only will you receive most of the same benefits of a traditional agent, but you'll also put more money in your pocket! Instead of paying a dedicated agent 3% to sell your home, you'll pay SimpleShowing a mere 1%. Although it might sound like a small percentage, when you're talking about a house that might be $500,000 or $1,000,000, the amount you save could be enough to buy a car!

If you're interested in SimpleShowing, please fill out the home valuation form. After just a few questions, you'll be on your way to selling your home for the best deal possible!


In the rapidly changing real estate industry, sellers must be aware of their property's fair market value to avoid falling victim to manipulative house prices. iBuyers, known for their promise to sell quickly, often purchase homes below their estimated market value, benefiting from the current housing market's runaway house prices. This has been corroborated by numerous real estate tech strategists who have researched prices paid by iBuyers in comparison to the market price.

With the iBuyers market booming, some fear that these large, tech-enabled firms could start to push prices artificially high, altering the real estate market landscape and potentially inflating home prices. This concern particularly arises when considering future prices and the impacts they could have on traditional home sales.

In conclusion, while the convenience offered by iBuyers might seem appealing, it's essential to recognize the risks and trade-offs involved. A qualified real estate agent implied that obtaining an accurate understanding of your property's worth is key to ensuring a fair sale. Thus, sellers should be circumspect, understanding that although iBuyers may expedite the process, they may not always offer the best deal in line with the fair market value of your home.