iBuyers are canceling closings
Contracts are being terminated sometimes just days before the closing is to happen, leaving home sellers stranded.
If you’ve read the news lately, you may have heard that iBuyer Real Estate companies have announced that they are temporarily suspending home buying for the foreseeable future. (An iBuyer company is an online real estate investment company that uses automated technology to make cash offers on homes.)
Their reasons do make sense in these unsettled times, such as safety of the agents and people working from home in order to stop the spread of COVID-19.
BUT there is now evidence that they are canceling contracts just days before the closing. After the offer has been made and accepted, after the inspection and after the paperwork is complete.
Why are the iBuyer companies doing this?
It seems that these online companies are afraid of getting stuck with too much inventory on their books and the possibility of the housing market prices declining. These companies don’t want to be left with homes that they paid today’s market value for and have to sell them at a loss, making no money.
Will this affect you if you have a contract already in place?
There are reports online from several people that have accepted an offer from an iBuyer and put a deposit down on another house, often a new build from a developer. The thing is that you, the buyer, can’t always get your deposit back if you break your contract. People have also moved for a new job and are getting stuck with their home after depending on the offer from the iBuyer, which is now being terminated.
What is Going to Happen to the Housing Market?
Although no one can predict what the housing market will be like when this pandemic ends people still need to sell or buy homes now.
The spring and summer are typically the busiest months for home sales. In these strange times many would-be sellers have been holding off putting their homes on the market until they feel safe.
Prices may go down this year due to an overloaded inventory because so many people have held off selling and put their homes on the market. Prices may also stay the same or go up if buyer demand grows since the interest rate has gone down.
What does that mean if you want to sell your home?
Well, if you want to sell your home I certainly wouldn’t recommend relying on the iBuyers at this point or ever. First of all, they charge you a high fee to buy your home, it typically adds up to a lot more than the average 6% that a real estate agent charges. Second, their offers are a lot less than the current market value, up to 11% less than a traditional sales route. Third, it seems their usual customer is someone who wants to sell fast even if they are leaving money on the table.
If you are seriously thinking of selling your home during this time, I would highly recommend calling a licensed and trained real estate agent, like me.
How can I help you?
I am still open for business! I am ready, willing and equipped to take care of clients. We have adapted to and can accommodate any and all buyer and seller needs.
I am still showing houses in person and by virtual tours. Our home inspectors are taking precautions against spreading the virus and are still working. The loan officers and title companies are still working and most closings are taking place within 30-45 days.
If you are looking for a home, contact me. I’ll be here for you!
Marie Shafer Real Estate
Realty One Group
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