iBuying is relatively new...
Whilst it’s difficult to pinpoint exactly when this type of service emerged, it’s been growing in
popularity for the last 6 years, particularly in America and is now becoming popular here in the UK.
What’s really caused this service to become more commonplace
is the development of technology.
Previously it would be impossible for a company to make an offer for your property instantly with any
degree of accuracy. It would be either too low (bad for the seller) or too high (bad for the buyer). And, of course,
any offers made always needed a human to assess value first, so would be far from ‘instant’.
Today, companies are able to gain accurate insight to a
properties’ value on demand through data analysis
enabling them to make offers instantly with confidence that they won’t lose money in doing so. With the accuracy
this data analysis brings they can also make offers more closely aligned with what a seller hopes to achieve, making
it a win-win scenario.
Ultimately this is where the growth of iBuying has come from, technology enabling buyers to make
sensible offers and sellers taking advantage of the benefits than an iBuyer transaction can bring (see more below).
What are the benefits of selling to an iBuyer
The primary benefits when selling to an iBuyer are the simplicity and speed of the transaction, which
can be relatively slow here in the UK.
Transactions with traditional buyers i.e people not companies, can feature a number of scenarios that
cause headaches for a seller.
- They change their minds
- A change in circumstances means they cannot proceed
- They’re in a chain which prevents them from proceeding in a timely manner
- There are problems with their mortgage application
...and so on.
This is not the case with iBuyers. They operate as a business and buy houses with cash, so these
factors (and many others) are removed from the equation. Basically this means that any offer made has a much higher
degree of certainty to actually complete.
It’s a significant benefit
since, according to a study, around 30-50% of sales can fall through
Closely linked to the simplicity of dealing with an iBuyer is speed. Because things are simpler there’s less that
can potentially go wrong and hold up the transaction. This is why the process moves much faster.
The average time to find a traditional buyer, according to Rightmove, is approximately 70 days - so
that’s an immediate time saving by using an iBuyer. Other time savings are more difficult to quantify, because the
complications vary so much from sale to sale - but it’s safe to say there would likely be several weeks saved, more
if you’re unlucky enough to have problems after an offer is accepted.
What fees do iBuyers charge?
These depend on the company - some offer their service for free (but might offer you slightly less for
your home) vs others who charge a transaction fee, usually as a percentage of the property value. There is no set
guideline for this and you should ask for details whenever you are made an offer by an iBuyer.
What is the typical process of using an iBuyer?
The first steps when using an iBuyer have the greatest difference vs a traditional sale. You provide
your property details online and the iBuyer will make an offer within 48hrs (usually much faster). Compared to the
typical process of selling a home (get quotes from estate agents, photos, listing, viewings etc) it’s clear to
see the benefits in terms of speed.
If you accept the offer
From there the iBuyer will get the paperwork rolling and potentially have a survey carried out on your
home to make sure there aren’t any problems - this is usually done quickly and can often be carried out without
access inside the property.
Should I use an iBuyer?
This will depend on your circumstances and personal preferences:-
If you need to sell quickly (for whatever reason) then using an iBuyer is an excellent option - the speed
at which the entire transaction takes place is unbeatable.
If you don’t want the hassle of dealing with estate agents and private buyers then selling to an iBuyer
could, again, be a solid option for you.x
Whilst there will be costs involved in selling this way you’ll have to weigh up if it’s the right
decision for you i.e if all the positives outweigh the costs...and only you can do this.
Where in the UK do iBuyers purchase?
iBuyers will usually make an offer on any property across the UK, though there may be some that
specialise in specific areas throughout England, Wales and Northern Ireland.