3 ON YOUR SIDE (3TV) - Selling a home can be daunting and exciting at the same time. Some consumers say they've found a new way to sell their home that's alleviating some of the headache. It's a method that's gaining popularity, but it may come at a cost.
Dora Cagnetto wanted to sell her townhome recently, and although it needed some minor repairs, Cagnetto says she just didn't want to take the time to do the work and wanted to sell it fast.
"I'm retired. I don't want to spend my retirement fixing up a place to sell," Cagnetto said.
That's when Cagnetto came across something fairly new in the real estate industry called Zillow Offers.
It's was launched in Phoenix just over a year ago by Zillow. Here's how it works.
You go online and with a click of the mouse, you ask Zillow to make you an offer on your home.
The offer usually comes in about 24 hours.
"They gave me an offer. They did an inspection. They gave me a final offer, and it went through just like that," said Cagnetto.
George Laughton is a realtor and helps Zillow buy homes like Cagnetto's. He says the process is easy and convenient.
"We like to say, it's so simple, like, we click a button and magic happens," said Laughton.
However, all that magic comes with a price tag.
"On average the fees average about 7% where when you list traditionally average about 6% so it's fairly close, you're giving up a little bit of money for certainly, convenience, flexibility," said Laughton.
Randy Cooney is a Valley real estate broker and he says the selling program is similar to Opendoor, which launched five years ago and has gained in popularity. And there's another one called Offerpad. In the real estate industry, these companies are all referred to as "iBuyers."
"The iBuyer is an investment buyer who is going to usually offer the consumer or the seller more of a wholesale price versus a retail price cause they have to take the property and they too have to make some profit from it," said Cooney.
In other words, if you use an iBuyer, Cooney says there's a strong chance you'll leave money on the table. That's because iBuyers pay less for the home than they'll sell it for, it's wholesale versus retail.
"For some consumers, that's OK. They have to move quickly, speed is important but for many others if they just wait a little bit and find that right buyer for their property they could retain a lot more dollars in the transaction," said Conney.
In Cagnetto's case, she sold her house to Zillow Offers and the iBuying company put it back on the market for about $10,000 more than what it paid. But Cagnetto says the convenience was well worth it for her.
"It went smoothly and quickly and I didn't have to do any of the repairs. I didn't have to worry about negotiations, I didn't have to worry about contingencies," said Cagnetto.
If you choose to use an iBuyer to sell your home, seek multiple offers from different companies and make sure you look at the different fees that may be involved.