What Is an iBuyer, and How Does iBuying Work?

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  Written by Katy Byrom

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  Edited by Jessica Johansen

An iBuyer is a real estate company that uses technology to make near-instant cash offers on homes.

When you sell your home to an iBuyer, you can pick your closing date to be as little as 8 days or up to 60 days after the initial offer. You also don’t need to make repairs before you sell, and you can stay in your home a few extra days after closing if you need more time to move out.

The trade-off for a convenient sale is that iBuyers usually pay less than you could get on the open market.

iBuyers like Opendoor and Offerpad are active in only 50+ U.S. cities, but these companies continue to expand into new markets as more home sellers look for a fast, convenient way to sell.

» JUMP TO: The best iBuyers | Should you sell to one? | How iBuyers work | Find iBuyers near me

What are the best iBuyers?

These are our top picks for iBuyers in 2024. In addition to well-known competitors like Offerpad and Opendoor, we include home trade-in services like Orchard and Knock, which help you list your home on the open market using a cash offer as a backup.

You’ll also find companies like Clever Offers that don’t buy homes themselves, but they allow you to compare cash offers from multiple buyers — including iBuyers. That way, you can easily find the most competitive offer.

Should you sell to an iBuyer?

Here are three reasons selling to an iBuyer might make sense for you.

You want a quick sale

Using an iBuyer makes sense if speed and convenience matter more than getting the best price for your home. Selling to an iBuyer is usually much faster than the traditional home sale process.

You can receive cash offers in as little as 24–48 hours and close in as little as 8 days. That’s just over a week from the time you submit an offer request to having cash in hand — a stunning pace for something as large as a home sale.

If you’re under time pressure because you’re starting a new job, or you inherited a property you don’t want, an iBuyer can take your home off your hands quickly. And they can pay a price close to what you’d get on the open market. 

You want an easy sale

Selling to an iBuyer might be the easiest way to sell your home, whereas the traditional home selling process takes more time and effort.

When you sell with a real estate agent, you’ll likely have to stage your home, including cleaning, rearranging, and redecorating. You might also have weeks of showings with strangers walking through your home. And once you get an offer, there are negotiations and counter-negotiations — and the sale could still fall through!

Selling to an iBuyer is more of an open-and-shut transaction. An iBuyer will likely have an inspector come to your home once to survey its condition, and then if your home qualifies, you’ll get an offer. The offer is usually non-negotiable, so you don’t have to stress about haggling.

You don’t want to worry about repairs

Traditional sales often require repairs and upgrades to the home. These updates could include anything from a fresh coat of paint to new light fixtures to an overhaul of the kitchen, all of which take time and money.

If you sell to an iBuyer, you don’t need to make any repairs or upgrades. They purchase your home as is, deduct repair costs from your offer, and take care of the repairs after closing.

What types of homes do iBuyers purchase?

In general, iBuyers purchase houses built after 1930 that only need cosmetic repairs before they can be resold. Distressed properties that need significant repairs or upgrades usually won’t qualify. If you can’t sell to an iBuyer, you could try selling your house as is on the market or selling to a “we buy houses” company.

How do iBuyers determine how much your home is worth?

One of the main innovations of the iBuyer industry is its use of data analytics to determine home values. The exact ways iBuyers do this are closely guarded trade secrets, but we know some of the factors they look at.

Comparable sales

One of the easiest ways to establish a home’s fair market value is to look at what similar homes recently sold for. Comparable homes are similar in size, condition, and location.

Your home’s condition

iBuyers conduct an in-person inspection to determine your home’s condition and estimate repair costs. They don’t buy homes in poor condition, so if your home needs a lot of work, they’ll likely pass.

Their own data sets on home values

Most iBuyers use tools like an automated valuation model (AVM) to help price homes. AVMs use an algorithm and data from thousands of real estate transactions to estimate what a home might sell for on the open market.

Input from local experts

iBuyers also consult experts in the local real estate industry. These experts look at the value estimates from analytic tools and tweak them based on local market dynamics. When it comes to your property’s value, what matters most isn’t what’s happening nationally — it’s what’s happening in your town, in your neighborhood, or even on your block.

Pros and cons of selling to an iBuyer

iBuyers offer a fast, convenient way to sell your home, providing cash offers quickly and streamlining the process. However, these benefits come with trade-offs, such as limited buying criteria, service fees similar to traditional commissions, and a lower offer than you might receive on the open market.

How does iBuying work?

Selling your home to an iBuyer

Selling your house to an iBuyer typically involves these steps:

• You submit an online form. The form includes information about your property’s location, condition, size, and more. If the iBuyer determines that your home is eligible for purchase, it asks for more detailed information, including square footage, how much you owe on your mortgage, and photos.

• The iBuyer quickly makes an initial cash offer — often within hours or days. The offer is usually non-negotiable. If you accept, you typically sign a purchase agreement online.

• The iBuyer sends an inspector to view your property or asks you to do a virtual inspection via video call.

• The iBuyer deducts the cost of needed repairs (if any) from your cash offer. Some iBuyers allow you to have your own contractor make repairs, but the iBuyer must inspect and approve the results. Final offers from iBuyers like Opendoor and Offerpad may be much lower than initial estimates.

• You can accept or reject the final offer. If you accept, you can choose the closing date within the iBuyer’s flexible window, often 10–60 days.

• On the closing date, you fill out the final sale paperwork at the iBuyer’s title or legal office. The iBuyer then transfers payment to your bank account.

Buying a home from an iBuyer

Purchasing a home from an iBuyer is a simple process that usually follows these steps:

• Download the app. Opendoor and Offerpad use an app to handle almost the entire purchase process. You can even unlock their properties with your smartphone for a private viewing.

• Browse the listings. On the app, you can browse all iBuyer’s properties for sale. In most apps, you can also look at other properties on the market, with an option to use one of the iBuyer’s real estate agents to submit an offer.

• Submit an offer. You can submit an offer directly through the app. Because iBuyers almost always refurbish the homes they buy, you should probably view them as finished products. Trying to negotiate further repairs or improvements will be tough.

• Close when you want. If the iBuyer accepts your offer, the next step is to choose a closing date. You can close in less than 2 weeks or up to 60 days.

Are there iBuyers near me?

The top iBuyers are mostly active in major metros in the southern states, but they’re expanding into new cities. Select your state from the drop-down menu to see which iBuyers and cash buyer companies are available in your area.

You can also use a free service like Clever Offers to compare fair cash offers from various cash home buyers near you.

When you request an offer through Clever, their team sources offers from local and national investors and iBuyers. You can also explore alternative home sale options, like seller financing or listing with a local realtor.

A customer service representative, known as a Clever concierge, stays with you throughout the offer process to answer any questions about your offers and ensure the buyer follows through on their end of the deal if you decide to proceed.

If you decide to list your home on the open market instead, you’ll only pay a 1.5% listing fee — about half of what most realtors charge.

FAQ about iBuyers

Recommended reading

The Best iBuyer Companies: Opendoor, Offerpad, and RedfinNow are the best iBuyers to sell your house to. Read our complete guide to find out what makes each of the top iBuyers unique, and which one is best for you.

We Buy Ugly Houses: The Good, the Bad, and the Ugly: You’ve seen their signs on the side of the road, or nailed to telephone poles. But how much do you really know about “We Buy Ugly Houses”? This guide details everything you might want to know about how they operate, and why you should (or shouldn’t) use them.

Opendoor: Reviewed and Explained: This leading iBuyer will buy your home for cash, and potentially close in a week. But are they too good to be true? Our definitive guide to Opendoor covers everything from their business model to how they compare to their competitors.

Discount Real Estate Agents and Brokers: Scam or Legit? You get what you pay for, as the saying goes. So what do you get for a discount agent? This guide tells you exactly what you can — and can’t — expect if you decide to use a discount real estate agent.