If you have been thinking of selling your home recently, you may have come across something known as an iBuyer. An iBuyer is a fancy term for a company that invests in real estate through the act of buying property directly from the property owner. This may sound great, but there are many pro’s and cons to consider before deciding if selling to an iBuyer in NJ is right for you.
Many NJ iBuyer companies state that they help home owners sell their homes quicker, and with much less hassle when compared to going with a NJ real estate agent. This is because the when a home owner sells to an iBuyer, they do not have to deal with showings, and many back and forth communications that arise when working with a real estate agent. The iBuyer is buying directly from the property owner, which on many levels simplifies the process, while providing a quicker closing and less hassle. However, this does not mean that selling to a NJ iBuyer is always the right decision.
How Do iBuyer’s Make Money?
Since an iBuyer is not charging any commission to the home owner, they need to make money from the home in other ways, or they would not be in business. The most common way an iBuyer makes money from buying a home, is by buying low and selling high. What this means is that if your home is appraised at $500,000, an iBuyer might make an offer with a 20% discount on that price, minus the cost of any repairs. If your $500,000 home is in perfect shape with no needed repairs, it might sell to an iBuyer in NJ for $400,000 in this scenario. Other companies may get crafty and lure you in with a higher offer, but use contractual language and a home inspection to renegotiate the price or exit the deal.
If your plan is to make the most money possible from the sale of your home, you will most likely NOT benefit from going with a NJ iBuyer. NJ real estate commission is fully negotiable, but many people have paid around 5%-6% for the sale of their home. In our scenario, a 5% Realtor commission equates to $25,000. Just a fraction of the $100,000 it will cost you to go with an iBuyer in NJ for the sale of a home worth $500,000.
Does it ever make sense to go with an iBuyer in NJ?
Yes it does, and there are a few reasons why. If you are not concerned with obtaining the most amount of money possible from the sale of your home, and you are in a situation where you do not have any time to spare, a NJ iBuyer should be considered. A home owner that is in financial distress, and needs to sell their home as quickly as possible would be an example of this type of situation. Another scenario would be a home owner that does not want to go through the traditional listing and sale process with a Realtor, and is not concerned with how much money they will make on the sale.
Best For You
As you can see, there are many different reasons why an iBuyer in NJ may or may not be a good solution to sell your home. Your personal situation will determine the best course of action. However, if making the most money possibly from the sale of your home is your main motive, then going with an iBuyer in NJ will most likely leave you disappointed.