Real estate is a cyclical business. And right now, one of the cycles we’re in seems to involve a number of companies claiming to make the home-selling process easier and more profitable for sellers.

In some parts of the US – notably, markets where there is short supply of housing inventory – these companies are targeting homeowners with a barrage of ads on television and online, as well as via text and phone solicitations.

The sales pitch goes something like this:  If you’re interested in selling your home but don’t want to do any work to get it ready or don’t want the disruption of buyers visiting your home, we’re the perfect solution.

The process of i-selling can vary a bit from company to company, but the basics roll out in this way:

  1. The homeowner reaches out to the i-seller, expressing interest. Typically, photos are provided by the seller and a questionnaire is completed that documents that amenities and condition of the home.
  2. The i-buyer responds with an offer to purchase the home.
  3. If the offer is accepted, the buyer then visits the home. If the home matches the photos and disclosures provided by the seller, a closing date is set. Usually, that closing date is fairly quick – two weeks is common.
  4. Note: at this point the purchaser may demand an inspection. If that happens, the offer may be renegotiated for less money than was originally agreed upon.
  5. Upon closing, the seller receives their proceeds, less any costs and fees retained by the i-buyer.
  6. Typically, the i-buying company then quickly lists the home … for more than they paid the original seller for that same home.


If that was your immediate response to #6 above, we totally agree!

You see, the whole premise of companies that are i-buying homes is that they will save you the “hassle” and “high cost” of putting your home on the market and working with an experienced real estate professional.

What they don’t disclose until you dig into the fine print, is the fact that you’ll likely pay the at least the same amount in fees – and potentially much more – to the i-buying company. While traditional real estate agents work on a 6% compensation model, these i-buying companies usually charge sellers fees between 6% and 9%

Also, bear in mind that the i-buying company will turn around and put your home on the market, typically with the same kind of real estate agent they don’t want you to use. For them to be able to do this, and cover the cost involved in having good representation, they have to purchase your home at a below-market price. Their ability to do that is the only way this transaction pencils out for them.

Less money? Higher fees?

There’s just no way in the world that’s likely a good situation for you.

It’s basic economics that supply and demand (in addition to amenities and condition) will dictate the length of time your home is on the market, and the price you will receive for it. In today’s “seller’s market” we are regularly seeing prices being driven higher than the asking price, multiple offers, and short market times. Those things happen because of competition for your home – something you give up when you sell directly to an i-buyer.


So, is there a situation where it makes sense to engage with i-buyers?

The answer is a qualified “yes”. If you need money very quickly, and provided you’re willing to accept less money in your pocket at the end of the transaction than you would using an experienced real estate expert, accepting an offer from an i-buyer may make sense for you.

When working with i-buyers you will not have the benefit of having an agent represent you. That means you’re at the mercy someone who is there to make sure things run smoothly for the i-buyer (not for you).

Also, remember that i-buyers tout the speed with which you’ll have your money as a huge bonus. However, a quick closing date may mean that you need to vacate your home one to two weeks after accepting an offer. That’s a pretty tall order for most homeowners!

So, before you make a decision that could actually cost you money, let’s talk. With my experience there are many strategies my team and I can put in place to help solve any challenges you may face if you’re considering selling your home.

Marti Reeder, Realtor, Managing Broker