It’s Never Been Easier to Buy or Sell a House Online. But Should You?
As you read this article on a big, medium, or small-sized screen, you probably don’t need to be reminded that the pandemic has allowed many people to live more of their lives digitally. These days, you can do everything from socializing and shopping to learning and working online. So, it makes sense that online homebuying has also surged in popularity.
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If you’re thinking of buying or selling your home online, there are a number of differences from the traditional, signing-a-stack-of-papers process. Here are some of the factors you should take into consideration before plunging into the world of digital real estate.
What Is iBuying?
Those looking to sell their homes can simply enter information about their property online, and newer services like Opendoor, Zillow Offers, Offerpad, and RedfinNow will make an initial cash offer on the property. These services are generally referred to as iBuying.
“Zillow makes a cash offer based on a home’s Zestimate, making selling a home a faster, safer, and easier process that is done completely online,” explains Zillow’s home trends expert, Amanda Pendleton. “Homeowners have the certainty of a fair market value cash offer from Zillow, and they can set their closing date, eliminating the need for open houses, showings, and repairs.”
If the seller accepts the offer, the company handles the process from there, taking over the process of marketing and eventually selling the home. How the iBuyer makes money on the sale depends on each company’s business model. Opendoor, for example, works on a fee-based model, in which they typically charge the seller five percent of the purchase price. Zillow also charges a fee, which averages just under six percent. In general, iBuying is a model that favors sellers who’d like to offload their properties quickly.
Should You Buy a Home Online?
In addition to selling your home completely online, it’s also possible to buy a home without ever physically stepping foot in it. According to a recent Zillow survey, 39 percent of millennials said they would be comfortable buying a home online, and 59 percent said they would be at least somewhat comfortable making an offer on a home after touring it virtually but not seeing it in person.
Thanks to advances in technology, a virtual tour can show you many of the same aspects as an in-person-showing, and buying a home this way can be a great option when time and distance are factors — especially during the pandemic. In an effort to limit travel, a cross-country move made after a virtual-only tour can be more practical than it sounds on the surface.
What to Watch Out for When Buying a Home Online
However, if you do consider buying a home online, Pendleton cautions that there are some intangible factors that you might miss when you don’t actually see the home in person.
“The sounds, the smells, the light in a home — it’s often those factors that give a buyer an emotional connection to a home and make them realize it’s ‘the one,’” she says. “That’s where they’ll need to rely on the experience of a trusted local real estate agent, which can clue them in about aspects like if there’s a lot of street noise, if there are families in the neighborhood, or if there’s great afternoon light that hits the backyard. Most agents now offer live video tours to help remote buyers better understand those externalities.”
The Advantages of Buying or Selling a Home Online
That being said, buying a home online can give you a competitive edge when it comes to snatching up a hot property.
“Buying a home via a digital walkthrough or online photos can happen very quickly and can provide an advantage to a buyer who is ready to act fast,” says Shaun Pappas, a partner at New York City-based Starr Associates LLP.
Especially in a tight market, being OK with skipping an in-person showing gives a buyer a leg up.
“In a sellers’ market with tight inventory, as we have seen the last year in the Hamptons, buyers had to jump and make offers without making time to visit the house,” says Yorgos Tsibiridis, a Compass broker in New York.
And when it comes to selling a home online, convenience is the main advantage. You won’t have to deal with sprucing up your place for open houses, watching strangers traipse through your living room, or reviewing multiple offers and buyer letters. Still, the decision to buy or sell virtually ultimately depends on who’s sitting in front of the screen.