Have you heard of Zillow’s newest program iBuyer? Here’s my thoughts on how it impacts you as a home seller:
Hi everybody. It’s Ruth. I’m sitting in the car in Newton and I wanted to share a few thoughts about one of my favorite topics, which is Zillow.
So Zillow has a program called iBuyer. There are a couple of programs that allow them to buy a property, make an offer on a property that looks good that’s right on the market and charges you seven and a half percent for the service, but you get to pick the closing date. This is great. Builders of new construction love it because 16% of people backing out of new construction deals do so because they fail to sell their home. But here you are. It’s almost like a car trade-in when you get to drive the car up until you have the brand new car to use. Sounds great. It sounds great because you get to choose your closing date.
You don’t have to scramble to find housing and you’re not paying two mortgages. The problem with it is the following: first of all, according to market watch on average, people selling through iBuyer system are selling netting 11% less than those sellers going on the open market with a real estate agent. So here’s a little bit of math. If you’re selling a home for $500,000, if you’re selling it through an agent, you’re going to net about $470,000. If you’re selling it with iBuyer through Zillow, you are going to net $418,000. That is about a $52,000 difference. You are leaving that money on the table.
Homebuilders love this. This is great for home builders. Fewer people are backing out. Zillow loves this. They’re buying homes at a discount. Who’s losing out? The home sellers. If you’re not really ready to leave $50,000 on the table, call, text, write a comment below.