iBuyers VS Agents: What’s the Best Option for Selling My House?April 19, 2018
Everyday at Felix, we ask ourselves, how do we make the home selling process better? We want to guide sellers through the simplest, most pain-free experience possible. Felix, combines the certainty of the iBuyer model with the personalized service, and higher sales price that can come from using a traditional agent.
Earlier this week, Zillow announced a major shift to their business model. They will be the newest entrant into the popular iBuyer space.
For those of you not familiar with the iBuyer model, essentially, they are glorified house flippers. iBuyers circumvent the listing process and will purchase your home directly from you. The sale typically closes within 3-10 days after you accept their offer. No showings, no open houses, and no uncertainty. Sounds great right?
Let’s take a closer look. Similar to the traditional agent model, there are positives and negatives stemming from selling your home to an iBuyer.
iBuyers vs Agents
This is every home seller’s dream come true right? A situation where they receive a firm offer for their house and can forgo worrying about the uncertainty of a deal potentially falling through.
To determine if the iBuyer model can beat out the traditional agent model, let’s take a look at the two key areas that matter most to sellers: total proceeds from the sale (after commissions & fees) and certainty of the sale.
Total proceeds from the sale
A traditional agent will typically charge 5-6% of the total sales price as their commission. So, if your home sells for $500,000, you’ll have to pay $25,000 to your agent as a commission.
iBuyer’s on the other hand typically charge a ‘service fee’ equal to 7-10% of the sales price. So, for the same $500,000 house, you are now paying anywhere between $35,000-$50,000 for peace of mind.
Why do iBuyers charge so much more? After all, the iBuyer is a middleman. They are essentially looking to resell your home almost immediately for a higher price whereas with an agent, you are selling your home to the end buyer.
Certainty of a sale
There is no doubt which model wins here. iBuyers will guarantee you the certainty of a sale and you’ll receive your proceeds in as little as 10 days after you accept their offer. Using an agent may not even result in a sale and if it does, it usually takes much longer for the seller to receive their proceeds.
Why not have your cake & eat it too?
With Felix, you can have all the cake you want! We’ve taken the best parts of each model to provide home sellers with the ultimate consumer experience.
Felix is the only brokerage that will pay you just for listing your home, won’t charge you a commission when it sells, and if it doesn’t Felix will buy your home from you! Yes, you read that correctly, but just to make sure we:
- Pay you just to list your home with Felix. Our agents will have up to 90 days to find a buyer and if they can’t, Felix will buy it from you.
- Unlike traditional agents, Felix doesn’t charge you a commission to sell your house. Commissions do a poor job at incentivizing agents to get the highest price because a $10,000 increase in the sales price of your home only leads to an extra $250 in the agent’s commission.