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360: Real estate agents, iBuyers are battling for business in the Denver metro area

Posted at 6:03 AM, May 13, 2019
and last updated 2019-05-15 19:07:48-04

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At the start of house hunting and house selling season, some new players are trying to change the game in the Denver housing market.

iBuyers, such as Zillow and Opendoor, promise a low-stress, low-risk path to selling your home. These companies make instant cash offers at the click of a button, but are you leaving money on the table?

We're going 360 to hear from multiple perspectives on real estate agents versus iBuyers, including an iBuyer who said time is money, home sellers who warn that you get what you pay for, an agent who doesn't want you to leave money on the table and a homeowner who wants to just keep it simple.

Homeowner: Keep it simple

If time is money, Chris Delorey has a spreadsheet for that.

"I'm in sales, so I’m used to building spreadsheets and comparing prices and developing ROI analysis, so I kind of did the same thing for this house," he said.

As his family grew from one child to three, they decided they need a bigger house than their three-bedroom home in Highlands Ranch, so he created a spreadsheet to compare home sale options, comparing the net takeaway from a traditional real estate agent with some brand new players in the Denver metro area: iBuyers Zillow and Opendoor.

"As soon as you reach out, someone hits you back," he said, adding that the process to get an iBuyer offer was quick and easy. "For Zillow to provide their initial offer, they asked for photos of the house."

Within a few days, Zillow sent inspectors and made an offer.

Delorey, who said he wasn't looking forward to a long to-do list to get the house ready for sale, was pleasantly surprised at how Zillow's offer compared to the market value other real estate agents had given him for his home.

"By my estimations, I maybe could have squeezed another few thousand dollars, but it would not have been worth my effort by a long shot," said Delorey, who ultimately decided to go with Zillow Offers. "It's been, frankly, less (of a) headache than selling something on Craigslist. I'd say the biggest reason comes down to not having to stage the house, do open houses and drag that process out."

The catch, he said, was Zillow's fee of around 7%, which is approximately 1% higher than traditional Realtors (thousands of dollars for most homes being bought and sold in Denver). Also, Zillow took some money off its offer for repairs that came up during inspection.

Still, Delorey saw the value in keeping it simple.

"I'm in sales and just as important as closing deals is understanding when you need to back out," he said. "We’re not thinking about this at all, and I’m not worried that something is going to fall through. We’re home free on this one and just fully focused on the next one, which is the fun part of the process."

Home sellers: You get what you pay for

Jan and Dan Beyer said they tried to sell their home through a discount, flat-fee broker last winter.

"The old adage, 'You get what you pay for' is true," Jan Beyer said. "Like anyone, we wanted to make as much money as possible. That didn't work out so well."

After a month with no offers and few returned phone calls, the Beyers were finished bargain-hunting and did not even think about iBuyers.

"It's not like you're selling your car — you're selling a house," Dan Beyer said. "It's not something to be taken lightly."

They found a traditional Realtor, Kelly Moye, who got them an offer in less than two weeks.

"I trusted her more to be able to sell it than anybody else or any other way," Jan Beyer said. "And she did."

Real estate agent: Don't leave money on the table

Realtors couldn't agree more, adding that if you get an instant iBuyer offer without putting your house on the market, you could be leaving money on the table and never know it.

"When people are vying for property, the chances are you'll get better price and terms in the end," Moye said. "If you put it on the market and got five buyers who wanted to buy it and negotiated an as-is clause where you didn’t have to make any repairs, now you’ve just made $5,000 more. But you’ll never know because you didn’t try."

When it comes to your biggest investment, Moye said, Realtors are your marketing director, business manager and psychologist in one, so unless you are a "distressed seller" needing to get out of a house immediately, going through iBuyers is a risk.

"It's like having surgery with your neighbor instead of a surgeon," Moye said. "It just doesn't make sense."

iBuyer agent: Time is money

Tell that to the 100,000 home sellers nationally who have already asked for offers from Zillow.

Ryan Boykin, a buying and selling agent for Zillow, said the company promises sellers certainty, along with no staging, no showings, no repairs and a flexible move-out timeline.

"For Zillow, time is money," said Boykin, who said Zillow offers more certainty than buyers who might back out at the last minute. "When you work with Zillow Offers, the level of certainty that they’re going to move forward and purchase your home is 100 percent because they’ve already said, 'Hey look, here’s the contract, we’ve signed the contract and now you’re choosing your timeline. That’s a lot stronger than a typical real estate contract which can fall out for any number of reasons."

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