If you’re feeling pressure to sell your home quickly, you may be looking for options. We’ll explain the benefits and reasons for selling a home through an online quote. Then, we’ll walk you through the process.
Who provides instant online homebuying quotes?
There are multiple alternatives for selling your home online, with various kinds of companies from which to choose. Here are brief descriptions of some of the different types that offer a near-instant online quote to buy your home:
- iBuyers: Larger real estate companies that purchase homes that are typically in better condition than homes purchased by investors and flippers. iBuyers are likely to offer more for your home than an investor or flipper. See our iBuyer guide.
- Small investors and flippers: These “we buy houses” companies purchase homes, make repairs and improvements, and then sell them for a profit. Flippers are often a good option for sellers with homes that need a lot of work.
- Buy-and-hold investors: These investors typically purchase market-ready homes at a competitive price and then convert them into rental properties or sell them to other investors who are seeking out investment properties.
- Trade-in companies: These companies can help sellers who need funds to purchase their new homes. A trade-in company will buy your current home for cash. With cash in hand, you can then purchase your new home without a sale contingency, which strengthens your offer.
How much do house-buying companies pay through online quotes?
As with any home sale, purchase price depends on numerous factors, such as:
- The home’s – and the lot – size
- The home’s location
- The home’s condition
- The home’s age
- The home’s details, features, and fix-ups
- Market condition (comps)
Online home-buying companies evaluate the same factors in their calculations; however, for investor-based house-flipping companies, their interest lies in turning a quick profit rather than what school district your house is in. For these types of “we buy houses” groups, expect to earn less than you might through traditional sales routes.
How much less will depend on the online quote formula used by the house-buying company. For example, if the market value of a home is $400,000 and the property needs $30,000 worth of repairs — minus a 15% service fee — it might leave the seller with $314,500.
Another example of an equation a “we buy houses” investor group might use to determine an online quote offer might be 70% of the after-repair value (ARV). Another house-flipping company may only offer 50% of ARV for a distressed property. Still, others may offer up to 85% or more for a home in a prime location, even if the property is in disrepair. The investor group offer range can vary widely depending on the condition of the home, the market, and the company making the offer.
Larger iBuyer companies like Opendoor and Offerpad tend to provide online quotes closer to a home’s market value, but these too may offer below market value or less than you will typically receive through a traditional agent-backed home sale.
A Feb. 2022 report from real estate brokerage service zavvie found that during the hot seller’s market last year, iBuyer cash offers peaked in the second quarter of 2021 at 104.1% of market value. Offers later decreased to 99.4% in the fourth quarter and may continue to be reduced as the market cools. However, the offer price alone is not the only consideration when weighing the benefits of a fast online quote.
Why might I want an online cash offer quote to buy my house?
There are several reasons why you might opt for an online cash offer instead of selling via the traditional agent-assisted method. Here is a list of some of the common reasons why other homeowners chose an online sale:
- You just need a fast home sale: It may be a job transfer that requires a move right away, a divorce that demands divvying up the assets of the marriage, pressing financial issues that necessitate a quick sell, or other reasons to sell fast.
- You need cash quickly: Tax liens, job loss, or other causes of income loss can drive homeowners to sell in a hurry.
- You don’t have money for repairs: A bad foundation is expensive to fix. So are fire and water damage. Some sellers don’t want to put money into their home just to get it sold. They prefer to skip the repairs and take a cash offer.
- You need a sale with certainty (less chance of falling through): If a buyer is counting on a home loan in order to purchase your house, there’s a risk they won’t get it, due to an appraisal that falls short or they don’t meet income criteria, etc. Cash deals don’t rely on those contingencies, so they tend to have more certainty.
- You need a simple process (less prep work and paperwork): Since you don’t have to prep a home for showings and cash buyers are less interested in repairs, sellers can save time and money. There are a lot of steps to go through with a traditional agent-assisted sale that you can skip with a cash offer. There’s also less paperwork since many cash buyers don’t ask for an appraisal or inspection.
- You want privacy (no public listing or for sale sign): If you crave privacy and the thought of showings and open houses gives you anxiety, a cash offer provides a nerve-quelling option.
- You have bad tenants: If being a landlord becomes a headache or tenants cause too much damage or disruption, a quick escape through a fast online quote may sound appealing.
- You inherited the home: If you inherited a house but have no interest in living in it, a quick sale might save you from unwanted work and investment. An online sale is especially helpful if the inherited home is located out of state.
If you’ve decided an online offer for your home is right for you, you’ll want to understand how it all works. HomeLight’s Simple Sale platform allows you to sell on your timeline – in as few as 10 days – by having our network of hundreds of cash buyers and investors compete to provide you with the best offer.
How does the online quote process work?
Let’s walk through the online quote process, using an example from HomeLight’s Simple Sale platform.
What is Simple Sale?
Simple Sale is an online all-cash offer platform created by HomeLight. It takes the stress and uncertainty out of selling your home.
It’s fast and requesting an offer is completely free. Simply provide information about your home, and (typically) within 48 hours you can review the no-obligation offer and compare it with Simple Sale’s estimation of what you might get for it if you listed it. If you decide to list it, Simple Sale will even recommend top-rated agents in your area.
HomeLight will provide a competitive all-cash offer in as few as 10 days.
Simple Sale makes your online home sale convenient and fast with:
- No agent commissions
- No closing fees
- No hidden costs
- No prep work: no staging or showing
- No requests to repair or renovate your home
How HomeLight Simple Sale works – 4 easy steps
If that sounds appealing, just follow these easy steps to start the process:
Step 1: Enter your address to request a cash offer
Go to homelight.com/simple and enter the address of the property you are selling.
Step 2: Tell us about the home you are selling
Answer a few basic questions about your home’s condition, how much work it needs, and your selling timeline.
Step 3: Receive and review your online cash offer
You’ll receive a no-obligation, all-cash offer, typically within 48 hours. With Simple Sale, there are no hidden fees or agent commissions. You’ll be able to see how the cash offer compares with what you might get for your home by listing with a traditional real estate agent. We’ll also provide a list of recommendations for top-performing agents in your market.
Step 4: You can accept the offer and get cash for your home
If you accept the all-cash offer, we guide you through to closing and you get cash for your home. You can sell confidently and close in as few as 10 days.
This example illustrates how an online offer process can proceed. Depending on the company or the property, to complete an online offer, many house-buying companies also schedule an onsite home assessment to verify the condition of the property. The offer amount might be modified if the company feels repair adjustments are necessary. Typically, price negotiation is reduced or eliminated with instant online offers.
You might decide instead to partner with a top-rated real estate agent in HomeLight’s network. We can help with that, too.
How do online homebuying offers compare with a traditional sale?
As part of your decision making, it’s wise to consider the difference in how much you might receive through an online quote compared with an agent-assisted sale.
It begins with those elements we told you cash buyers evaluate: property location, size, and condition, and the market. In both cases, these aspects of your property can impact the sale price, but when you’re selling through an agent, you may be required to address your home’s condition by making costly repairs. Sellers who use an online offer service weigh how much they’re saving by not having to prepare the home or make repairs.
Timing can also play a role in what might be considered costs, such as if you have a new job waiting for you. It’s not easy to get top dollar when you’re in a hurry to sell – unless your home is optimally located and in top condition … and it’s a seller’s market, when inventory is low and buyers are eager. Conversely, even if your home is in tip-top condition and in a desirable zip code, a buyer’s market can drive down prices due to excess inventory.
What are the drawbacks of selling a house through an online quote?
With all the cash-offer benefits we listed above, there are drawbacks to consider when using an online homebuying offer service. These can include:
- May receive a lower offer compared with an agent-assisted sale
- Less room for negotiation
- No real estate agent to advise you
- Potential for dishonest/disreputable buyers
- Working with a company that lacks the funds to purchase your home
Why you might want to sell your home with a top agent instead
Just as there are reasons you might want to sell quickly by accepting an all-cash online offer, there are also circumstances that may lead you to sell your home with a top agent.
Here are a few common reasons a homeowner might consider selling their home using the traditional agent-assisted method instead of pursuing an online cash offer:
- You want top dollar for your home: Cash offers tend to be 5% to 10% lower than offers through a traditional agent-assisted sale. Investors won’t offer market value for your home.
- Timing is not as crucial: Expect a traditional real estate transaction to last longer than two months, not including your prep time. The average number of days on market is 66: 18 days to get an offer, and 48 more to close. If you’re not in a hurry, it can be worth the wait to get a higher price.
- Your home has special features or upgrades (solar, pool, ADU, etc.): Upgrades, renovations (especially if they add square footage), and special features make your home more attractive to the buyer pool – and potentially worth more money. You may not be able to recoup that ROI with an online cash buyer.
- You can afford some repairs and prep work: Preparing your home for sale by investing in some minor repairs can attract a bigger buyer pool and generate higher bids. Be careful not to over-repair your home.
- Your home is in top condition: You’re likely to get a higher offer going the traditional real estate sales route if your home is in great shape and won’t have any problem passing inspection.
When in doubt about that first offer from a house-buying company, it might be wise to consult a top real estate agent. To find a top-performing agent in your area, consult HomeLight’s Agent Match. This free platform analyzes real estate agent reviews, actual home sales data, and historical performance to connect you with a top agent who can get top dollar for your home.
Conclusion: You have more home selling options than ever
Whatever your reasons for selling your home, you have choices in how you do it. For those looking for a quick sale or who don’t want to do any sales prep or repairs to their homes, seeking a fast online quote is an excellent option.
Even with that option, there are alternative methods, thanks to different types of cash buyers, including iBuyers, investors, flippers, trade-in companies, and buy-and-hold investors. It’s important to determine which type of buyer is right for you, based on your timeline, your home’s condition, your financial needs, and the market conditions.
It’s a good idea to request more than one online quote. If you’re unsure about the process or the sale price, it might be a good idea to check with a top agent to compare how much you might make through a traditional sale.
Remember, you can always choose to sell your home through the traditional agent-assisted method. You may get more for it, but it’s also likely to take longer and require more work, from prep to repairs to paperwork.
Header Image Source: (Max DeVesty / Unsplash)