Collateral Analytics develops real estate analytic products and tools just completed a study of iBuyers and what their fees average for the home seller.
iBuyers charge sellers a “convenience fee” of 6% to 9.5% on average nationally PLUS a generous repair allowance.PLUS another 3% to 5% or more to compensate the iBuyer for liquidity risks and carrying costs. In all, the typical cost to a seller appears to be in the range of 13% to 15% depending on the iBuyer vendor
A median priced home sold last month for $428k this means the cost to sell is in the range of $55,600 to as much as $64,200 with an iBuyer. HOLY COW!
Zillow announced last week that their goal is to have their new mortgage company, Zillow Home Loans, finance transactions through it’s iBuyer division, Zillow Offers. I assume this means Zillow wants two transactions from their home purchase by their iBuyer division.
First, they want the home seller who is getting taken advantage of by Zillow on the sale side, Zillow also wants that home seller to finance their new home purchase with them. So, Zillow can take advantage of them for a second time. The second mortgage transaction would be with the buyer who buys the Zillow home.
Zillow wants to take over both the real estate industry and mortgage industry and give them a little more time they will be coming after the title industry.
This makes me ask you—“Should I as a real estate agent even show a home listed by Zillow or OpenDoor?”
For home buyers are you ok with buying a home from a HUGE multi-billon company that in essence “robbed” the previous home seller of potentially over $50,000? Could you live with yourself knowing this?