Don’t Let Opendoor Steal Your Equity – The Truth About iBuyers
iBuyers (online companies that buy houses quickly for cash) are almost never a good idea for sellers, no matter how urgently they need to sell a property. Learn how these companies work, why sellers should be wary of their promises, and how John Jones Real Estate can get you a better deal.
Hey guys! John Jones here… Hey something l want to talk to you guys about that’s kind of a new phenomenon in the last couple of years. And, last year alone, it is reported in the United States, home sellers left four to six billion dollars on the table, of their equity, to Ibuyers.
What is an I buyer? It’s companies like Opendoor (is the most popular around here, the one that I’m most familiar with) and basically they offer home sellers instant offers, instant cash, close quick, make it really convenient.
Now just think about it for a second: if someone is offering to buy your home quick and put it back on the market really quick don’t you think they have a cushion in there to make a profit? So the two situations I’ve seen lately that have really kind of, I guess got me energized about this matter, is two instances where both our clients had gotten Opendoor offers.
The first one: They got an offer of $214K, OK ? Net, a net offer, of them. They’ll come in a high price. They hit you with a 7 to 10 percent service fee, closing costs, and then even repairs. This particular offer is before they even came out to assess repairs. So this house I felt like, as-is (and I told the sellers as-is right now) we can sell this home for $240,000.
After commissions and whatnot they were probably netting around $226K… something like that. I also told them that I thought if we spent a little money (about $10K on this home), which we could use our fixer-upper program (a program unique to John Jones Real Estate) where we get the repairs done for people, get the painting done, get our vendors in there.
With preferred vendors they have a delayed payment strategy so no out of pocket for the client and get top dollar for the home. I thought it’s about $265,000 home. Put about $10K in it. That would make you the most money. And the third program that we have, and I’ve had for 15 years, is hey I will do a guaranteed sale, you want an instant offer? I’ll do it as well!
So in this particular case, he wanted my instant offer he did not want to show his home. He had dogs. He just, I don’t know, he didn’t want to show his home, or people going through his stuff, so I made him an offer of $220,000 which was $6,000 more than the offer he had on the table.
I went, you know, just put the home back on the market, spent about $10K~$12K. We sold the home for $272,000 In that particular situation, if he had done that (which I proposed for him to do) he would have made about another $30,000 over the Opendoor offer.
A second situation was very similar: An older gentleman from La Vergne. $215,000 was his offer (net to him). He chose to do our Fixer-Upper Program. We spent about $20,000 on the house. We ended up getting about $275,000. There again, net to him was another $ 30,000.
Now this is equity that a lot of people are just leaving on the table and before you do that please give us a call… please give us a call… We’ve got so many programs: Fixer-Upper, Guaranteed Sale… We’ll have the program to fit your needs, get you the most money… the best program for you.
Why in the world would buyers do this? Well here’s why: It’s quick, It’s convenient. In a lot of cases a buyer runs out there, they go to an open house, they find that house… Oh my God we got to have it! Oh this is awesome! We can’t lose this house.
Well in this market… the seller of that home says “well we can’t take a sale of home contingency” so they call Opendoor. And everybody has good equity right now, prices have gone up, and a lot of times they’re not even sure what their home is worth, so they say “man that sounds pretty good, let’s do it”, and they don’t even think about it.
Before you do such a thing call John John’s Real Estate. I guarantee you we got something to help you, that will fit your needs, but more importantly, put more money in your pocket! Thanks a lot. Call us if we can help you: 615.867.3020