Hiring a Real Estate Agent vs. an Online Real Estate Company
A new trend in real estate has started to pop up with online real estate companies. Several companies have started to offer programs where they will buy homes directly from homeowners. Is it better to hire a real estate agent or use an online real estate company?
What are Online Real Estate Companies?
Known as a one-stop-shop for buying and selling real estate, online real estate companies provide fast sales. They will make an offer on your house quickly, but for many, these companies will likely fall into the category of "it sounds too good to be true."
Benefits of Online Real Estate Companies
An online real estate company provides convenience. This is actually the main reason why homeowners would even consider using this type of company for selling their home.
They work to make the selling process as simple as possible and offer plenty of flexibility on the timeline. While there are situations where using an online real estate company might make sense, most homeowners will want to hire a real estate agent.
Why a Real Estate Agent is Better than an Online Real Estate Company
Sure, convenience can be a big benefit, but at what cost? Nothing is free or even cheap when it comes to real estate. When you choose an online real estate company, you might gain access to a very fast home sale, but the numbers simply won't add up to make it a good deal for most homeowners.
These types of companies have to make money, of course. They charge a fee for their services. Opendoor, one of the more popular options, have an average fee of 7% of the price of your home for their services. That fee can be as high as 13%, which is more than double the standard real estate agent commission.
Along with the fee, online real estate companies don't have the ability to offer nearly as much for your home. When you sell with a real estate agent, you'll be able to sell your home for a higher price, in comparison.
Online real estate companies want to make a profit not just from the fee they charge, but also when they resell the home. They will offer you less than the market value of the home so they can mark it up and resell it.
You may also end up paying more for repair costs as these costs are at their discretion. They do an inspection and deduct any repair costs from the price they are willing to offer you.
Selling with a real estate agent in Madison means you'll be able to sell your home for a higher price without the high fee. Agents know the local market and have the ability to attract buyers much better than an online real estate company can. When you choose an online real estate company, the emotional element is lost on buyers.
Even if you're in a situation where you need to sell your home fast, an agent can often do a much better job. If you want top dollar for your home, a lower fee, and the ability to attract multiple offers, choosing an online real estate company like Opendoor or iBuyer is a huge mistake.