The Costs and Drawbacks of Instant Offer Real Estate

Traditional methods for selling your home include listing it for sale, negotiating offers, inspecting it and appraising its value – but instant offer real estate companies offer another solution: they buy houses quickly without inspections and appraisals being necessary – ideal for homeowners who face time-sensitive situations such as job relocation or divorce proceedings. Unfortunately, though these companies claim to take out some of the hassle associated with selling your house but come at significant costs for both seller and buyer.

One major downside to working with these companies is the lower prices they offer for your home, even though their offers claim to be based on market value. Their estimates may often underestimate its true worth; some home sellers even find the lowball offers disconcerting. Furthermore, many of them charge high service fees that eat up nearly all of your proceeds upon sale.

One additional cost associated with selling your home involves the time and expense associated with preparing it for market. Homeowners may be required to perform repairs and upgrades prior to listing their house for sale, which can be both costly and time consuming. Many instant offer companies advertise no commissions; however, their “service fees” still add up more than full commission fees; additionally these companies may require you to perform certain repairs themselves or deduct their cost from your final payout at closing.

Instant offer companies generally exclude properties that do not meet their stringent criteria from consideration, meaning if you own an older home, live in rural area, or face foreclosure, chances are slim that instant offer companies will take an interest. Furthermore, instant offer companies do not provide real estate agents who specialize in optimizing home values as part of the deal.

Instant offer companies are designed to benefit homebuyers and investors, not homeowners, so it is vitally important that consumers fully comprehend all costs and drawbacks associated with instant home purchases before considering them. Redefy provides free market analyses; for more information please contact us.

Chris Rediger is Co-Founder and President of Redefy Real Estate. If you are thinking about selling your home, our experienced team would be delighted to provide a complimentary Comparative Market Analysis (CMA).

This article originally appeared on Forbes and has been edited for style and length.

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