Questions to ask an iBuyer when Selling Your Home
Hey, I’m Brant Phillips with Houston Capital Home Buyers, and I wanna talk to you about iBuyers. So you may have heard about iBuyers and you may have been approached about iBuyers or perhaps you filled a form to get an offer about selling your home to a potential iBuyer. So I wanna give you some questions that you can be prepared to ask to an iBuyer if you’re thinking about going down that path.
So first thing I wanna talk to you about real quickly is what is an iBuyer? What does it stand for? Well it stands for a few different things depending on who you talk to, who you ask or what you read. You may get a different response to that. So it stands for a few different things. So first and foremost, an iBuyer, what is an iBuyer – to a company that basically uses technology, does a lot of online lead generation to a different websites and blogs and things like that. And thru clickable ads online and they’re an investment company. So the other thing that the “i” sometimes represents is that, like it’s an investment type of buyer. And what it also means is Institutional Buyer, meaning there’s big hedge companies, big conglomerates that basically metamorphosis that of wall street and they figure out a way to go out and basically, in a very high level, buy a lot of houses in, hundreds and thousands and thousands of houses, but what it really comes down to is that these companies are using technology to use an online lead generation, using software and technology also to make a lot of their offers. And ideally, you know, when it works well, it can make, there are some advantages too that some iBuyers, reputable companies that are using this technology can make things easier for you. But there are some things that you need to be prepared for, right?
So how does this process work? Before we get to the question so, a buyer does advertising right? So they may put a link that says “instant casher” “instant casher offer for your house” “sell your house quickly”- those types of things and you know, maybe you fill out a form, or you make a phone call and iBuyers’ gonna ask you some basic questions like your property, your house, and may ask you to send them some pictures or video of it and they’re gonna probably, depending on which company you talk to, will either send you an offer right there on the spot which you should be aware, be very cautious of that if they’re saying that’s like their official offer without seeing the property, without having someone inspect the property. That is a red flag in my opinion unless they have some type of clause where “hey, this offer is conditional on who’s coming and inspecting the property”. Because what typically happens when you agree to an offer to a company, and this is what we do, we send one of our team members to go out, take pictures, and just verify some things right before we officially move forward but once that’s happen, then well you know, you can’t move forward but what you have to be wary of is that a lot of these companies will give you a price that you like over the phone on initial conversation only to come out and significantly reduce their offer and, you know they may claim it’s based on the condition of the home which could be true but a lot of it is their MO, their method of operation is to do that, to give you a number that you like then come out and reduce the offer, or they don’t disclose all of the fees and things that they have.
So obviously, selling your home with an iBuyer is not the same as a traditional real estate transaction with an agent. The benefits, right speed, the timing, not having to worry about showings especially in the day and age that we’re living now. You know, the CoVid 19 and all these things going around. And you know, you don’t have to worry about these people coming in and out of your house. You don’t have to worry about doing repairs or keeping it clean – all these types of things. All these buyers are typically not gonna be looking at the property, not being concerned about the condition of the property cause that’s gonna be factored in into their offer. And they’re able to come out and do repairs and all those types of things just like we do whenever we buy houses so you know, for some people, it’s an ideal situation. The people who typically work the best with iBuyers and companies like ours are people who value their time over money, who value their peace of mind over money. They have more important things to tend to in their life rather than getting every last dollar out of the house. And I’ll tell you that if you’re in the position where you know, absolutely getting every dollar that you can out of the house and maximizing the value of your home, it’s not gonna be with an iBuyer. Right, it’s not gonna be with our company. The best thing for you to do is to do what we do, which is to go in, do repairs, paint, flooring, roofing, landscaping, staging the home. You know, hiring an agent, a realtor, listing it, dealing with the showing, going to inspections – all those types of things. That is the way you can potentially make the most of money but I understand that’s not for everybody. That’s why there’s an industry of iBuyers and there’s companies like ours, and we’re a local real estate investment company. We’ve done hundreds and hundreds of deals over the years so if you’re considering working with an iBuyer type of company, or investment type of company to sell you home, I wanna give you some questions to ask, some questions to consider, whenever you are talking to some of these companies.
So first question is who’s gonna look at my property?
Right, so you need to know who you’re dealing with, right? And so there’s a difference between these big conglomerates of iBuying companies that are using 3rd parties who know what people do come out there. And then, versus working with a smaller, local company. So find out who is going to come here in to my house. What is their name? What is their role? Things like that. You know, that’s some of the benefits of working with a smaller company such as ours. If you call us, you’re likely gonna talk to me, or one of my team members, and that’s one of us who’s gonna be coming out to take a look at your house so you know who is coming into your houses, it’s not just some joe schmo off the streets.
Number two, is the investment company you’re working for credible? Or is the iBuyer that you’re working with credible?
This is real, fairly easy to do. Just, you need to do a little bit of research and just find some things out like you know, are they passing your gut test? Do they seem trustworthy? Do they seem credible? Just, if there’s any red flags or things that they’re not saying that just doesn’t make sense to you and if it doesn’t, you know, if you can’t understand what their value proposition is, or what their process is, it’s probably not a good fit cause this is not that complicated and a lot of, I’ll tell you, cause there’s a lot of boot camps and seminars, and people coming into the real estate space cause they think they’re gonna get rich quick coz they watch all these late night infomercial shows, and that’s just not the case, right? And so if they don’t pass that gut check of just, of being like a trustworthy, credible person, I wouldn’t move forward. If they do, you still need to utilize the rona raegan addage of trust but verify principle and that leads me to number three.
Does the iBuyer or investment company you’re working with have a good reputation?
So in the world that we live in, right? In the world of the internet, or the world of Google, it’s very easy to do that these days, for the most part. I would recommend just starting with a basic Google search, of searching that company’s name or even the individual that you’re working with, the company owner’s name as well is a good place to look and also the better business bureau. Hopefully you should be able to find positive reviews and positive remarks and ratings on Google. And you could look at their business page on Google and see if they have reviews and also better business bureau.
Alright, so let’s go to the next question: Do they have skin in the game?
So it should be their skin, their cash, not yours. So whenever you’re selling your home, money should flow to you. Not you to them. So unfortunately, in this world that we live in, this world of Google and you know, Zillow and Amazon, and all these online platforms, there’s also scam artists that are out there as well. So never should anyone be asking you to pay any money to receive an offer from an iBuyer or come out, inspect your house, or anything like that. A traditional real estate agent and the traditional real estate process doesn’t work that way and neither does this. So you want to look and see who has skin in the game. What do I mean by that from the investor’s side? Well, how much earnest money are they putting down? Do they have an option for you? Look to those things coz a lot of our competitors, we see that they will put down like a dollar or ten dollar earnest money, you know, and no option fee. And that’s not right. So if they’re asking for an option, you should get paid for that even if it’s you know a hundred dollars for a few days. You should be getting compensated to provide that option and if it’s earnest money, you know it needs to be more than a hundred dollars. It should be at least, say for example, like five hundred dollars.
So another question for you to ask is what are the fees? What are the closing costs, right?
Be cautious here because a lot of these iBuyer companies, they have big fees and they don’t readily disclose those so you wanna make sure that there’s no hidden fees. You wanna know what those are upfront. You wanna know what your net is going to be? What does the seller net sheet show right? That’s one benefit of working with us is that we don’t have any fees. We go to a closing. You know all of the closing calls, all of the fees we pay. You of course are responsible if you have a lien, if you have a mortgage or any outstanding taxes. You’ll be responsible for that but no other fees.
Okay, another question that you wanna ask is when do you get paid and who’s going to pay you, right?
So that’s a very important question. So with us, you know, it depends on the contract or when we’re going to close. We can typically close in as little as 5 business days. So you just need to ask that question like, “Hey, when are we gonna close and when do I get paid?” That being said, we have, you know, the option, the luxury if you will, with the ability to not close so quickly. Maybe you don’t wanna close for another 30-45 days. That’s fine with us. We need to know upfront, communicate with the title company and things like that but find out when you’re gonna get paid and who is going to pay you. And uh, once again, this is a great time too to clarify, you know, are there any other hidden fees or anything like that right? So you really wanna clarify that.
And the last question you may consider asking is anything that you want!
So don’t hesitate to ask any questions that come into your mind, right? There’s no such thing as a dumb question. So any concern that you have, any question that you have, you need to ask that to whoever you’re working with, right? Because there are, this is a big decision, right? Selling our home is, these are some of the biggest financial decisions that we make in our life. So don’t hesitate to ask any questions that you have, any concerns that you have. You know, if you’ve seen negative reviews, ask them about that, right? You wanna feel good about that. The good thing is in this situation if you’re considering selling your home to an investment company such as ours or an iBuyer, you do have options. There are a lot of others, there are a lot of people in this space. So feel free to call 2 or 3. Make sure that you feel good with whoever you’re working with.
So I hope this was helpful. Let us know if we can help you. If you have questions, we’ll be glad to do the best that we can to answering any questions for you in selling your home.