Should You Sell to an Investor or List with an Agent?

By Jason Penrose

Jason has been licensed since 1999, and is currently one of the top 20 agents in Arizona for homes sold.

One of the most common questions I get is whether it makes more sense to list a home for sale or sell it directly to a cash investor or iBuyer. The answer comes down to numbers, and the numbers are pretty clear.

iBuyers cost more than most sellers realize. Right now, the average iBuyer costs sellers about 13% to 15% of the sale price. Compare that to traditional broker commissions, which typically range from 5% to 7% depending on the market. All commissions are negotiable, but the national average sits in that range. The spread between an iBuyer and a traditional sale is significant.

Fix-and-flip investors take an even bigger cut. Those investors who buy properties to renovate and resell typically offer between 50% and 70% of the home’s after-repair market value. That’s a massive discount.

Here’s what it looks like on a $500,000 sale. An iBuyer nets the seller approximately $406,250. A broker sale nets the seller approximately $462,500. That’s a $56,250 difference in favor of the seller when you list with a broker. On a half-million-dollar home, that’s real money, and it’s money that the seller walks away from by choosing the faster, seemingly easier route.

When an investor sale might make sense. Unless there are extenuating circumstances where you need the home sold in the next 72 hours for cash, putting the home on the market with a broker who markets the home not just to investors but to all buyers is going to net you the most money for your property.

Getting a fair market appraisal is always a good idea. If you want to know exactly where your home stands before making this decision, getting an appraisal on your property is never a bad idea. It gives you a real number to compare against any offer, whether it’s from an investor, an iBuyer, or a buyer on the open market.

If you’d like to discuss your specific circumstances and figure out whether listing or selling to a cash investor makes more sense for your situation, give me a call. Reach me at (602) 738-9943 or email me at jason@thepenroseteam.com. You can also visit buyaztoday.com for more.

I look forward to hearing from you.