In this guide, we will walk you through the important factors to consider when choosing whether to work with a real estate agent or an iBuyer when selling your home.
We will evaluate the upsides and trade-offs of each approach by explaining key aspects of the selling experience for both.
Let’s get to it.
Speed of Transaction
If timing is a priority, it’s helpful to understand how the iBuyer vs Realtor experience compares in terms of closing speed. Here’s a look at the difference.
Cash Offers vs Mortgage-Financed Deals
An iBuyer pays in cash, which means no mortgage is involved in the sale.
That cuts out the lengthy approval process that agent-assisted buyers typically go through in a traditional sale. So, iBuyers often close in 1-2 weeks.
By contrast, a Realtor sale commonly involves mortgage financing with its many moving parts and dependencies that can stretch the timeline to 30-60 days.
These include lender underwriting, an appraisal, property inspection, and buyer contingencies — all of which create opportunities for delays and deal fallout.
Optimization for Speed
Speed is a primary characteristic of the iBuyer service. That’s facilitated by using technology throughout the process, from automated cash offer requests to scheduling an inspection.
This approach reduces the amount of paperwork, the need for in-person meetings, and the potential for communications delays.
Also, because iBuyers purchase directly, they can move faster. Realtors need time to properly market a property and find a qualified buyer.
Convenience
The effort and involvement sellers need to invest can vary considerably depending on whether they work with an iBuyer or a Realtor.
This section explores key distinctions and how they can impact convenience.
House Preparation
Selling a home the conventional way, with a real estate agent, usually involves preparing the property for buyers who expect it to be in turnkey condition.
That means fixing damage and making updates, which requires time and money.
A cash offer for a home from an iBuyer, who is willing to make an as-is purchase, means you avoid pre-sale repairs and renovations.
How “we buy houses” companies work is that they are open to buying properties in nearly any condition. Many actively look for genuine fixer-uppers.
So, if you’re wondering how long it takes to sell a house to a cash buyer like an iBuyer, there’s no need to worry about wasting your time and even money in repairs when working with these investors.
Additional Arrangements
Beyond buying homes as is, iBuyers often offer “buy before you sell” services.
In this situation, the benefits of a cash offer on a house include giving sellers access to their home’s equity before the sale closes.
The iBuyer can bridge the financial gap, allowing sellers to make an offer on a new home that isn’t contingent on selling their old one first.
Realtors can facilitate both transactions as well, but they generally don’t directly offer financial services to support this kind of process.
Cost of Services
No matter which of the two ways you will choose to sell your home, you’ll incur costs associated with completing the sale.
In a traditional transaction, you’ll usually pay a commission to the listing agent. That ranges from 2% to 3% of your home’s final sale price.
Most often, you will also be expected to cover the commission of the buyer’s agent. So the total agent fees typically add up to 5%-6% of the sales price.
iBuyers don’t always charge a standard commission, but most apply a service fee.
The typical amount they charge sellers ranges from 5% to 6% of the agreed-upon purchase price. Market conditions, location, and demand can all influence that amount.
Regardless of the path you take — using a Realtor or selling to an iBuyer company — you’re also responsible for seller-related closing costs.
Examples include title insurance, escrow fees, transfer taxes, property taxes, and closing agent fees. These often fall between 1% and 3% of the home’s sales price.
Availability
The availability of services varies geographically for iBuyers vs real estate agents.
Real estate agents work in nearly every market, from small towns to large cities. Their widespread presence makes them accessible to serve properties across many locations.
Most iBuyers limit their coverage to densely populated areas with active real estate markets.
They tend to stick to places where homes sell fast, prices are more uniform, and there’s plenty of data to feed into their automated valuation models.
That means your choices for how to get a cash offer on a house may be limited in some places simply because iBuyers don’t serve your ZIP code.
This is something to consider when weighing the pros and cons of iBuyers when selling your property.
Proceeds
When selling a home to an investor vs using a realtor, how much investors pay for houses — an iBuyer in this case — is often lower than a traditional buyer’s offer.
It reflects the trade-off for the benefits of cash home buyers inherent in such direct transactions.
With iBuyers, the offer you get online is preliminary. While not usually the highest price, it may still be very appealing. However, it’s subject to further reduction after a property inspection.
iBuyers use their own inspectors who make adjustments for estimated repair costs.
Sellers commonly report that those adjustments are higher than expected or even overstated, somewhat akin to those “we buy houses” scams.
The result is a lower final offer and further diminished net proceeds, making you wonder if these “we buy houses” companies are ethical.
When you work with a Realtor, the process usually involves a third-party inspector. Then you negotiate with the buyer about repairs. The costs are based on independent contractor estimates.
As a result, the final sale price is less likely to be eroded by unexpected and biased adjustments, which can help preserve your net proceeds.
A Better Alternative to an iBuyer
If closing quickly for cash is your main goal, iBuyers aren’t your only option. Selling your house to an investor offers the same kind of fast and easy sale.
However, an important difference is in how they handle seller costs, which can notably impact how much you net from the sale.
Unlike iBuyers, they don’t charge service fees, and it’s common practice for them to cover seller closing costs.
Accessibility is another difference. Local real estate investors are easier to find than iBuyers. They typically serve a wider range of locations, including smaller towns and less populated areas, that iBuyers don’t.
You can connect with cash house buyers near you through our platform, which has a nationwide network of investors.
Take the simple step to request cash offers on your home from multiple reputable investors at once, compare the numbers, and decide what works best. There’s no obligation to accept any offer and no fees to use our platform.
