Let’s be blunt. The traditional way of selling your home is a pain, what with preparing it to look its best, hiring an agent, showing it, negotiating with buyers and starting over when deals fall through.
There’s another option: selling to an iBuyer — short for "instant buyer" — who will purchase your home for cash, eliminating hassle and uncertainty. iBuyers use technology and algorithms to generate quick cash offers, allowing homeowners to sell with minimal effort.
This can make shopping for your next home easier, as you’ll have cash in hand and no contingency on selling your current one. However, this convenience comes at a cost, as iBuyers typically offer below market value and charge service fees.
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According to data from CoreLogic, iBuyers accounted for less than 0.5% of all home purchases in 2023, acquiring about 1,000 homes per month throughout the year. While iBuying surged during the highly competitive post pandemic housing market, its presence has significantly declined.
In 2021 and 2022, iBuyers were purchasing as many as 9,000 homes per month, but that momentum has since slowed. Despite this shift, Opendoor and Offerpad remain two of the largest players in the industry and continue to operate in select markets across the U.S.
Leading iBuyers: Opendoor and Offerpad
Generally, iBuyers want homes of a certain age and price range that are in good condition with no more than an acre or two of property. Many homes are eligible, but they can’t have significant issues with their condition, foundation or structure. Sellers must have clear title.
When you request an offer online, you provide the home’s address and some details about it. The iBuyer’s automated valuation model pulls publicly available data about the property, recent comparable sales in your area and local housing market data before sending you a preliminary offer.
Next, the iBuyer assesses the home’s features and condition, identifying any necessary repairs but not cosmetic work or upgrades, like replacing Formica countertops with granite. They will ask you to provide photos of your home upfront, and may schedule a walk-through of your home with a representative via live video on your phone.
If you accept the preliminary offer, the iBuyer will send someone to inspect the home. You should be transparent and thorough about the features and history of your house, including what you love about it.
Within a few days of the inspection, you’ll receive a revised offer, based on any new information, like the home’s condition, new comparable sales and market trends. This final offer will show your cash payout at closing after deducting a mortgage payoff, the iBuyer’s fee, the cost of repairs and your share of closing costs. Depending on the iBuyer, you’ll have from four to seven days to accept or decline the offer.
If you accept the final offer, you can choose a closing date in as few as two weeks or as many as 60 days. This gives you time to find your next home and coordinate the settlement for your old and new homes.
Compare the cost of selling to an iBuyer
A traditional real estate agent who sells your house typically charges a commission of 4% to 6% of the sale price. In 2024, the national average commission was 5.32%, according to Clever. After costs for repairs, staging and closing, you can expect to spend about 10% of the final sale price, according to Rocket Mortgage.
That compares with 7% to 18% of the home’s value that iBuyers will charge you for closing costs, repairs and service fees.
The low end of that range may sound comparable or even better than the 10% you’re likely to spend for a traditional sale, but there’s another cost that iBuyers generally don’t highlight in their sales pitch. Your home’s valuation in the preliminary and final offers before any fees could be less than your home’s current market value.
The difference covers the risk the iBuyer assumes for selling your home. Meanwhile, you’re foregoing negotiating with buyers and potentially receiving multiple offers, which can increase your sale price.
To estimate how much money you’re leaving on the table, get a comparative market analysis from a local real estate agent. Multiply the recommended list price by the average percentage of list price that homes in your area have currently sold for. Then, compare the result with the iBuyer’s valuation of your home before deducting costs.
If your home’s value has risen strongly over the past several years and you plan to downsize to a smaller, less expensive place, you may not begrudge any money left on the table. If you need to sell fast, you may appreciate having an iBuyer purchase your home as-is.
But if you plan to buy an equally expensive home or need to conserve your equity to meet other future goals, you may not want to sacrifice a penny for convenience.
Use our tool, in partnership with Bankrate, to compare current mortgage rates:
Final thoughts on the evolving iBuyer market
In January 2025, U.S. home prices rose 4% year over year, with a median sale price of $418,284. Home sales also increased by 3.5%, reflecting a competitive market despite a 7% average 30-year fixed mortgage rate.
If speed and simplicity are your top priorities — and you can afford the potential trade offs — selling to an iBuyer may be a viable option.
However, if your goal is to maximize equity, particularly when moving to a similarly priced home, a traditional sale could be the better choice. With rising home values and steady demand, listing with an agent may provide greater negotiating power and the opportunity to receive multiple offers.
Before making a decision, compare an iBuyer’s offer with a comparative market analysis from a local real estate agent to determine what works best for your financial goals.
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