Explanation of an iBuyer and why transferees shouldn’t use them
There is no doubt that selling or buying a home can be complex. More prominent real estate companies started buying and selling homes through iBuying. This newer way to sell houses and property popped up.
But what is an iBuyer? How does it work? Is it worth it for me to sell my home to one?
An iBuyer, in simple terms, is a real estate company that leverages technology to buy and sell homes in hopes of making a quicker sale than the traditional real estate process would. The main reason is that with iBuyers, people can buy and sell homes almost entirely online, and the buyer may never even step foot in the house before signing the dotted line.
While some iBuyers have been around since 2014 but mainly due to the Covid-19 pandemic, iBuyers started to take a hold of a decent portion of real estate transactions. The main reason is that home buyers and sellers could show or search for houses online and take virtual tours. Then they could make offers and complete the process online before getting to their new destinations.
iBuyers vs House Flippers
Many people confuse iBuyers as being in the same realm as house flippers. Flippers typically buy properties at low prices and then relist the house for a higher price in hopes of making a profit.
iBuyers look for homes that are more market-ready than those houses flippers purchase. iBuyers tend to make a more fair offer for what the property is worth during the market’s value. Fees are short. All iBuyer companies have fees worked into their submission.
Should I Use an iBuyer?
Often, people who are in a hurry to get to their new destination turn to iBuyers. They think that because their process is more accessible than the traditional way, they can be on their way sooner. But relocating for a job, using an iBuyer, is probably not the best route because you could be leaving money on the table.
If you are relocating for a new position, the first step is to review any relocation benefits offered by your new company. For example, employee relocation packages often offer home buying and home selling programs. This means there could be special programs that help moving employees sell their current homes and buy a new house in their new destination.
When employees take a relocation job, they often think they will not have enough time to sell their home before their start date. This would make many believe that an iBuying company is the way to go. But any reliable relocation management company (RMC) would strongly side against iBuyers.
Advantage of an RMC over iBuyers
Some of the most sought-after relocation benefits are home sale programs. In basic terms, relocation home sale programs provide assistance to homeowners so that they can move to their new city for the desired or assigned start date. Each RMC will have different terms and conditions for its offered real estate programs. But most programs will include payments to cover real estate commissions and closing costs. Therefore, every home selling assistance program differs depending on the seller’s/buyer’s situation. The type of program a moving employee can use also depends on relocation policies specified in the employee’s offer letter. Direct Reimbursement, Buyer Value Option (BVO), and Guaranteed Purchase Offer (GPO) are three of the most commonly offered relocation home sale programs.
Each of these programs offers different advantages to transferees. Direct reimbursement is the most common program. This home-selling program is where the employee will list and sell their home on their own and be reimbursed by their new company for closing costs and other fees.
The BVO program is where the RMC will buy the home from the moving employee and sell it to a buyer with a competitive offer. Finally, the GPO program is the handiest; this is where the employee will list and try to sell their home independently. If, after a set amount of time (typically 30-120 days), the employee is unable to sell their home, the RMC will purchase the home from the employee so that they can make it to their start date on time.
GMS Employs Real Estate Experts
Global Mobility Solutions (GMS) has been the industry leader in relocation since 1987. We’ve assisted in millions of moves since and have taken pride in making a seamless relocation process with top-notch customer service. We understand that selling a home in a tighter time frame adds to stress.
That is why GMS only employs the best real estate experts to help our clients sell and buy homes promptly while getting checks next to all their needs on their list. With over 30 years of experience, GMS knows how to get relocating employees moved on time without leaving too much money on the table. For more information on our home-selling programs, please reach out to set up a free consultation on how GMS can help. Or check out our Knowledge Base for more insight on other services GMS can offer those looking to relocate for a new job.
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