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Selling a house these days can be pretty quick and painless. All one has to do is contact any of the multiple companies that will buy your home for cash. They come out, tour your home and then within 24 hours return a cash offer to you. Simple right? Of course it is, but please be aware that this “convenience” comes at a huge cost.
Let’s look at a real live example, which happened to be right down the street from my house. One day a new listing popped up in the neighborhood. It was listed by Zillow’s inhouse real estate office called Atlas Realty. The price was $395,200 for a 3 bedroom, 3 bath, 1533 sq. ft. home which was built in a duplex style meaning it shares a party wall with the home next door. It does back to open space which definitely adds value. The listing was priced well and it took only 3 days to go under contract with a closing date in 30 days.
The home closed at it turns out that there were multiple offers, and the home sold above asking for $408,000. That’s great news for the neighborhood. It is the highest price any of the paired homes have sold for and the first to break $400,000. It will serve as a nice comparable for the next 6 months or so and I suspect more of the similar properties will list and sell above the $400,000 threshold. So why write this story? I believe, the seller made a very poor choice on how to go about getting her home sold. Keep reading to find out why.
Upon researching the public records, I found that Zillow purchased the home from the seller for $375,700. the difference in their purchase price to the ultimate sales price was $32,300. You might be saying, that’s okay because the seller would have likely paid a commission to sell with a Realtor and that makes the quick sale with no showings worth the extra cost. Fair enough and you might be right but let’s assume that she got the same price that Zillow was able to get at $408,000. The agent commission would have come to $24,480 which is 6% of the sales price, which would have netted the seller at $383,520 or $7,820 more than she would have made from her quick sale. It’s true that she didn’t have to deal with showings, but it was under contract in 3 days and then the showings would have ceased. Unfortunately, the story doesn’t end here.
Zillow regularly charges a convenience fee of 9-12% to the seller when they make their initial cash offer. The fee is for Zillow to cover their expenses of maintaining the home and reselling it including the commissions to the agents in the secondary transaction. That means that the seller is still paying commissions to agents on a transaction they are no longer involved in. Assuming this was on the low end of the spectrum at 9%, now the seller that took Zillow’s cash offer is paying an additional $33,813 for the convenience of not having any showings for only 3 days of showings. Add that to the $7,820 she would have saved by using a local knowledgeable Realtor, such as the Kurtz Krew at Coldwell Banker, and the seller walked away from an additional $41,633 in her own pocket.
I don’t know what this sellers predicament was and why she opted to sell to an ibuyer company rather than list it outright. I’d be willing to bet that she didn’t know the decision had costed her so much. If an ibuyer is something you have been considering, let me offer an alternative. Coldwell Banker has a program we like to call Real Sure. With this program, we can bring you a cash offer right at the listing appointment. I’ll be straight with you and let you know that the offer won’t be fantastic and it would have additional fees just like every other ibuyer program, however, you’ll want this offer. Why?
With the Real sure program, the cash offer is just the beginning. After receiving the cash offer, the Kurtz Krew will begin to aggressively market your home to help you sell it for the absolute top dollar. When interested parties call to ask if there are any other offers on the property, we can unequivocally answer “Yes!”. That already forces other potential buyers to up their game when they know they are in a competitive situation. In most cases, we will get you a much better offer than the cash offer but let’s say that you get nervous and then decide to accept the cash offer from Real Sure, then a reluctant buyer does submit an offer and that buyer’s offer is higher. You can terminate the contract with Real Sure with absolutely no penalty whatsoever and take the other buyer’s offer. What does all this mean for you? Peace of mind that your home will sell and you can move on and start shopping for your new home with confidence.
If you would like more information on the Real Sure program or a free home market analysis to determine what your home may sell for, contact the Kurtz Krew at 720-421-4580 or email Bryan at bryan.kurtz@coloradohomes.com.
