These days iBuyers are big in the news. Have you heard of Open Door and other iBuying companies? What they do is bring a sight unseen cash offer that closes quickly. The seller gets to move without a hassle of selling in the open market. Is open door right for you and me?
Open Door Makes Your Profit
I think the jury is out. I’ve seen plenty of iBuyer houses on the market for $30,000 or $75,000 or even a hundred thousand dollars more than what was paid to the seller within just a few weeks. IMHO, the seller left a lot of their hard earned money on the table.
2021 Was The Year of Multiple Offers
Moreover, during 2021, it was very common to hear of owners receiving quite a few multiple offers with aggressive terms. Selling to an i-buying company may have left money on the table for owners. And then again, maybe not.
Risks Associated With Flipped Houses
About 45 days ago, my clients made an offer on an OpenDoor listing. First, I have to say as an experienced agent, what a hassle. Very difficult to reach the listing agent. Their in-house title company operates like a clunky seventies sci fi robot. Never able to reach a live person. When my buyers terminated on the inspection objection, it took forever to get their earnest money returned.
Why did they terminate? Just about every aspect of that house had issues – bad HVAC, bad deck, structural issues, needed a roof. You don’t always see these things when you are falling in love with a house. But you sure do on the inspection.
Needless to say, with that laundry list of issues, my clients rightly bailed. So, if you are reading this and your house maybe is not in the best shape and some automated “we pay cash” buyer is knocking on your door, maybe that route is right for you.
Talk to a Realtor About iBuyers!
But, I would first speak to a Realtor. Oftentimes, home sellers are happily surprised at the current market valuation of their homes. And cash buyers are always looking for a deal. Usually at your expense.
But, I digress. It’s been awhile since I wrote a blog.
Real Life OpenDoor Example
What about buying a home from OpenDoor? There can be some great deals. Because I showed one of their listings, they are always sending me updates on houses. The update I received today for a house in Westcliff shows a buyer just went under contract getting a potential deal. Here’s the scoop:
The house was listed two hundred plus days ago for over $800,000. Remember, Denver/Boulder is a hot sellers market. Usually homes this year sold in days. So 200+ days is a super long time.
The house took eight price reductions to go under contract. Yikes!
It’s actually listed now around $707,000 and under contract for over $25,000 less than it was paid for by Open Door realty company. That’s not a very good money making business plan for flipping houses.
If You Only Read One Thing Today, Read This !!!
House flipping is usually buy low, hold briefly, sell high. So, the buyer might be getting a deal. I would be darn certain to do a thorough inspection. That’s just based upon my own experience for clients this year. After all, “you get what you pay for.”
What’s your experience? Would you work with an iBuyer? Keep the conversation going and add a comment below.
Boulder Real Estate News blog by Bob Gordon Realtor
I’m Bob Gordon, on-again, off-again blogger on all things Boulder and real estate. I’ve been selling homes since 1995 and am here to be a resource to you for all your Boulder real estate needs. ~ Bob