Sellers: How much should an #iBuyer offer for your house?

You would not bend over to pick up twenty grand?

This will be short and sweet, because I want for you to share it with every homeowner you know. This is strategic self-defense for your equity.

If you sell your home with a solid listing agent who is working for you, not using his sign in your yard to generate leads, your net return will be 92% or 93% of Fair Market Value.

Accordingly, that’s how much an iBuyer should offer for your home. Their benefits – certainty and rapidity of closing – will be eaten up by their follow-up demands for repair concessions.

If the offer is less than 92%, you’re better off listing. The process will take around 30 days longer, but repairs will be a smaller bite and you will end up netting more money – conserving more of your equity.

If you bought your home for $200,000, 20% down, and it is now worth $300,000, your net equity in the home is now around $100,000 – unrealized.

At 85% – a typical iBuyer offer – you retain $55,000 of that appreciation. Your original $40,000 becomes $95,000. At 92%, you keep $76,000, so your original $40,000 is now $116,000.

What’s the difference? An entirely different neighborhood, on move-up, or the start-up capital for a business or who knows what.

Are you telling me you would not bend over to pick up twenty grand?

My take? You’re almost certainly better off listing – with the right agent.

How can you tell a closer from a loser? Average Days-on-Market over the past five years should be as far under 30 days as attainable. And average Original List Price/Sales Price should be as close to 100% as attainable – ideally over.

Whether you sell with an iBuyer or a listing agent, your objective as a seller is to get the highest/safest/soonest return on your investment, in that order of priorities. iBuyers are safe and soon, but they will eat up huge portions of your equity.

If the iBuyer offer is less than 92%, you will do better by listing with an agent who knows how to move houses.

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