Top iBuyers | iBuyers near me | Pros & Cons | Should I sell to an iBuyer? | How pricing works | The selling process | FAQs
🔑 Key takeaways
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An iBuyer is a large real estate company that buys and resells homes using technology to streamline the process. The “i” in iBuyer stands for “instant” because most iBuyers can make an offer on your home in 24–48 hours and close in two weeks or less.
Selling to an iBuyer lets you skip the hassle and uncertainty of listing with a real estate agent and negotiating a deal with a private buyer. You can close on your own timeline and let someone else worry about fixing up your house.
The trade-off for a quick, convenient sale is that iBuyers don't usually pay as much as you’d get for your house on the open market.
Selling to an iBuyer isn't an option for most homeowners because these companies have strict purchase criteria and they only buy houses in select metro areas. Still, if you're interested in selling you can request a free, no-obligation offer from any of the top iBuyers and find out if your home is eligible.
How do iBuyers make money?
iBuyer companies try to purchase houses that can be resold for a small profit on the open market. iBuyers leverage sales data and their own pricing models to provide home sellers with near-instant offers on their houses.
As part of the iBuyer business model, these companies also charge a service fee for the speed and convenience they offer. Opendoor and Offerpad, the two largest iBuyers, charge 5% of the sale price, while RedfinNow charges a variable fee that can be as high as 13%. This fee helps to offset the iBuyer’s carrying costs (utilities, property taxes, etc.) and ensure profitability.
Along the way, iBuyers make money by offering other built-in services for buyers and sellers, like title insurance and mortgages.
Are iBuyers legit?
Yes — iBuyers are legit real estate companies that can give you a near-instant cash offer and purchase your home in less than two weeks.
iBuyers usually make fair offers, but they're not the best option for everyone because the certainty and convenience they offer comes at the cost of services fees (5% or more) and a slightly reduced sale price.
👍 iBuyers are good for…
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👎 iBuyers are bad for…
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What kind of houses do iBuyers buy?
Each iBuyer has slightly different purchase criteria, but in general iBuyers purchase owner-occupied houses that only need minor repairs.
Typical iBuyer purchase criteria |
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🏠 Built after 1930 |
💰 Valued at $100,000–$600,000 |
🌲 Located on 1.5 acres or less |
👤 Owner-occupied |
Every company has exceptions, so it's best to request an offer from iBuyers near you to find out if you're eligible to sell. For example, Opendoor generally purchases homes worth up to $600,000, but will pay as much as $1 million in select markets.
Are there iBuyers near me?
The top iBuyers are currently active in 40+ cities across the country, so availability is limited. However, iBuyers continue to expand into new markets as the business model becomes more popular.
iBuyer | States |
|---|---|
Opendoor | AL, AZ, CA, CO, FL, GA, ID, IN, MN, MO, NV, NC, OH, OK, OR, SC, SD, TN, TX, UT, VA |
Offerpad | AL, AZ, CO, FL, GA, IN, KS, MO, NV, NC, OH, SC, TN, TX |
RedfinNow | AZ, CA, CO, GA, IL, MD, MA, MN, NV, NC, OR, TN, TX, VA, WA |
Top iBuyers in 2022
Opendoor
Opendoor
Full ReviewService Fee
5%
Closing Date Window
14-60 days
Average Rating
4.3 | 2346 reviews
Opendoor is the best option for most home sellers who want to use an iBuyer because the service fee is capped at 5%, closing times are flexible, and the company is active in 45 markets across the country.
Request a free, no-obligation offer from Opendoor now!
Pros
- 5% service fee is lower than competitors
- Additional in-house services, including Opendoor Home Loans & OD Title
- Highly rated in customers' online reviews
Cons
- Offer prices may vary by market
- Limited ability to negotiate
- Buyers may find Opendoor's repairs insufficient
Opendoor is currently purchasing homes in 45 locations, including:
- AZ: Phoenix, Tucson
- CA: Los Angeles, Riverside, Sacramento, San Diego
- TX: Austin, Dallas-Fort Worth, Houston, San Antonio
- UT: Salt Lake City
As of November 11,2021, Opendoor's weighted average is 4.3 based on 2346 reviews.
- Reviews.io: 4.37 | 1931 reviews
- Better Business Bureau: 3.73 | 337 reviews
- Website: www.opendoor.com
- Phone: 1-888-352-7075
- Email: contact@opendoor.com
Offerpad
Offerpad
Full ReviewService Fee
5%
Closing Date Window
10-90 days
Average Rating
3.9 | 271 reviews
Offerpad promises the certainty of a cash offer and a fast closing on a date you choose. However, the company charges a 1% cancellation fee and generally makes less competitive offers than Opendoor.
Pros
- Generous closing window compared to competitors
- Late checkout option gives sellers up to 3 days to move out after closing
- Access additional services, such as free local moves within 50 miles
Cons
- You'll have to sign a binding contract before knowing the final offer price
- You might face a 1% cancellation fee
- Offerpad reserves the right to back out at any time
Offerpad is currently purchasing homes in 22 locations, including:
- AZ: Phoenix, Tucson
- AL: Birmingham
- FL: Jacksonville, Orlando, Tampa
- NC: Charlotte (+ neighboring parts of SC), Raleigh
- TX: Austin, Dallas-Fort Worth, Houston, San Antonio
As of November 16, 2021, Offerpad's average customer rating is 3.9 based on 271 reviews.
- Sitejabber: {ibuyers.offerpad.sitejabber_rating} | {ibuyers.offerpad.sitejabber_count} reviews
- Review.io: 2.67 | 9 reviews
- Better Business Bureau: A+ | 2.53 | 47 reviews
- Website: www.offerpad.com
- Phone: 844-388-4539
- Email (Sellers): info@offerpad.com
- Email (Buyers): buyers@offerpad.com
RedfinNow
RedfinNow
Full ReviewService Fee
5-13%
Closing Date Window
10-30 days
Average Rating
4 | 4 reviews
Compared to its competitors, RedfinNow handles a relatively small volume of iBuyer sales and has high service fees (up to 13%). However, RedfinNow shines in several niches, thanks to its willingness to accept older homes and its availability in a wide range of California cities.
Pros
- Expanded presence in cities across California, including several not served by other iBuyers
- Large and trusted corporate brand
- Older homes (built after 1930) are eligible in select cities
Cons
- Relatively expensive services fees (up to 13% of the offer price)
- Relatively limited flexibility on closing window, compared to competitors
RedfinNow is currently purchasing homes in 31 locations, including
- AZ: Phoenix
- CA: Inland Empire, Los Angeles, Orange County, Palm Springs, Sacramento, San Diego, San Francisco
- CO: Denver
- TX: Austin, Dallas, Houston, San Antonio
- WA: Seattle
As of November 16, 2021, RedfinNow has an average rating of 4 across 4.
- Website: https://www.redfin.com/now
- Phone: 951-229-0511
- Email: redfinnow@redfin.com
» DISCOVER: Our complete iBuyer rankings and reviews.
iBuyers are gaining market share
iBuying transaction volumes have been increasing year-over-year for several years, with 2020 being an exception as iBuyer transactions dropped by 50% as a result of the pandemic.[1]
In 2021, iBuyers had a record year, purchasing over 12,000 homes in the second quarter of the year alone.[2]
Opendoor, the largest iBuyer to date, is on the path to being in 100 markets, which would give it a 4% market share in the U.S. residential real estate market.[3]
These trends could signal changes in the way houses are bought and sold, even if iBuyers only end up capturing a small percentage of the overall real estate market. iBuyers provide a hassle-free, predictable experience that realtors could have a difficult time matching.
Pros and cons of selling to an iBuyer
✅ Pros
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❌ Cons
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Should I sell to an iBuyer?
Selling to an iBuyer makes sense if you need a fast, predictable sale and don’t mind getting less money than you might on the open market. The certainty and speed iBuyers can give you when you sell your home is almost unparalleled.
However, if you have at least a few weeks to spare and want to get the maximum value for your home, working with a realtor is a better option.
Most iBuyers offer free, no-obligation estimates, so it’s worth requesting an offer to see how much an iBuyer would be willing to pay for your home.
✍️ Editor’s note: If you aren’t satisfied with the offer an iBuyer gives you, connect with a real estate agent and tell them you’d like to sell your home quickly. Agents can adjust their approach to help you find a buyer quickly while still getting a fair price for your home. Most agents can provide you with a free comparative market analysis (CMA) that will show you what your home is worth by comparing it to similar homes on the market. |
iBuyer vs. realtor fees
Most iBuyers charge a 5% service fee, on top of the typical closing costs home sellers pay, which can range from 1–3%. iBuyers also deduct repair costs (1–2%) from your initial offer. By comparison, real estate agents usually charge 6% to sell a home, and you might have to pay for repairs out of your own pocket.
iBuyer | Realtor | |
|---|---|---|
Fee | 5% service fee* | 6% listing commission |
Closing costs | 1–3% | 1–3% |
Repair costs | 1–2% | 1–2% |
Total | 7–10% | 8–11% |
*Opendoor and Offerpad have a fixed 5% fee, but RedfinNow charges a variable fee that ranges from 5–13%.
However, iBuyers are unlikely to pay as much for your home as you'd get on the open market, so a realtor's listing fees could easily be offset by a higher sale price.
Home sellers who use a discount real estate service like Clever can hire a full-service real estate agent without paying full price — saving money and still getting the best price on the open market.
👋 Get connected with top agents near you today!
How do iBuyers price homes?
iBuyers rely on several inputs when they are pricing a home, including:
- Local comparisons
- Proprietary algorithm with advanced data sets
- Input from local pricing experts
- Inputs from you on features, upgrades, and condition
While iBuyers are able to use all of this information to provide you with an instant offer, they do a video inspection and sometimes send an inspector to your house who can assess repair costs before you’re presented with a final offer.
Repair costs could range from 1–2% and may make your final offer lower than the initial estimate.
How are iBuyers different from cash buyers?
Unlike iBuyers, cash buyers seek distressed properties that they can force appreciation on through significant repairs and upgrades This is also known as "house flipping."
Cash buyers typically use a comparative market analysis and their own local knowledge to establish a price for houses.
iBuyers, on the other hand, pay close to fair market value for homes but charge service fees to help them make a profit.
How does selling to an iBuyer work?
Regardless of which iBuyer you sell to, you'll go through a similar series of steps:
- Complete the iBuyer's online submission form.
- If your home is eligible, you'll receive a preliminary offer within two days.
- The iBuyer will conduct a virtual and/or in-person inspection of your home before making a final offer.
- If you accept the final offer, you'll sign a purchase agreement online and schedule a closing date.
- The iBuyer will complete the necessary paperwork for you to sign on closing day.
- You'll receive your funds within several days of closing, or sometimes even the same day.
How long does selling to an iBuyer take?
iBuyers typically give sellers an estimate on their home's value within 24–48 hours of receiving a request. After that, the sale can be closed in less than two weeks if you’re in a hurry — but the closing date is flexible.
That’s very fast compared to the typical selling time of 47 days.[4]
However, the speed the iBuyers provide comes at a price: services fees and a lower sale price than you’d get on the open market.
It’s hard for realtors to match this speed, although some can in a hot market.
If you're working with a realtor and you absolutely need to sell quickly, they can adjust their approach to expedite the process. To do so, they may have to lower the original asking price.
FAQs about iBuyers
What does iBuyer mean?
The “i” in iBuyer stand for “instant” since iBuyers are companies that make instant cash offers on houses. iBuyers have strict purchase criteria and only operate in select cities, so they're not an option for most home sellers. Learn about the pros and cons of selling to an iBuyer.
What is an iBuyer in real estate?
An iBuyer is a large, venture-backed company that buys houses at or below fair market value to resell them on the open market. iBuyers use a combination of proprietary algorithms, local comps, and pricing expertise to generate offers for potential sellers. Find out how an iBuyer would price your home!
How does iBuying work?
- iBuyers have online portals where home sellers can request an offer by filling out a simple form.
- After the iBuyer has received the customer’s information, they’ll evaluate the details of the property and offer an estimate.
- If the customer still wants to proceed, the iBuyer sends an inspector to the home to note any necessary repairs that will be deducted from the offer price.
- The iBuyer then presents the seller with a final offer which they can either accept or reject.
- If the seller accepts, they can pick a closing date.
- The iBuyer will resell the home after they take possession and list it on their website.
Mike DelPrete. "iBuyer Market Share Set to Drop by Half in 2020." Accessed February 12, 2021. Updated November 21, 2020.
Mike DelPrete. "iBuyers Are Back: Purchase Volumes and Prices Soar to Record Highs." Updated July 29, 2021.
Opendoor. "Opendoor Investor Presentation." Accessed February 12, 2021.
Realtor.com. "Real Estate Data — Inventory." Updated December 2, 2021.