Should You Sell to a “We Buy Houses” Company in Jacksonville? Read This First

Posted on May 24, 2022


The pandemic changed things, including the way some people buy and sell homes. For many, open houses and potential buyers coming through their house with an agent wasn’t worth the contagion risk. Instead, iBuyer companies that buy homes for cash gained even more traction. Even though we now have a vaccine, iBuyers will continue to be popular with home sellers who prioritize speed and a stress-free transaction.

iBuyer companies have become especially popular in Florida over the past several years - so if you’ve been looking for home buying companies based in Jacksonville, FL., it’s no surprise. However, there are a few things you should consider before handing over the keys to the latest “buy your home right now” company. 

You’re Cutting Out the Agent - Not the Fees

Home sellers often assume that iBuyers will provide a cheaper service because they cut agents out of the transaction completely. It’s true that a traditional agent will cost home sellers about 6% of their home sale - that’s 3% to the listing agent and 3% for the buyer’s agent (find out more about how Houwzer does listing fees differently so sellers profit more). 

It’s simply not true that iBuyers save you money compared to a traditional listing, though - and there are a few reasons for that.

To begin with, competition is a driving force behind home prices (especially in a seller’s market). Having just two offers instead of one can net you thousands of dollars more for your home because you can leverage them against each other. When you sell to an iBuyer like OfferPad, though, the open market doesn’t determine the price - rather, the iBuyer does, and they always have their own margins in mind. And because you only have one offer, there is little room for negotiation (and most iBuyers won't negotiate, anyway).

And while iBuyers don't charge agent commission, they typically charge "service fees" that amount to about the same anyway. OpenDoor charges 5% for service fees, and 1% for closing costs. 

iBuyers are for-profit companies - which means that they really can only make money if they buy the home from you for less than what it's worth, and pocket the difference. So their offers will always be below market value. Ultimately, a MarketWatch study determined that iBuyer offers net 11% less for homeowners than their counterparts on the open market do. In other words, even after you account for the savings from agent commissions, you still make less money through iBuyers.

“One of the major misunderstandings home sellers have about iBuyers is that they will buy the house from them at full or over market value,” explains Davis Doolittle, a Jacksonville-based listing agent.

It’s fairly standard for home buyer companies to give you a generous offer price, then deduct for fees, home repairs, and updates they feel are necessary afterward - which can give home sellers a misleading idea about how much money they’ll receive. 

So what's the advantage of selling your home to an iBuyer?

For some people, iBuyers can be a great solution to their current problems. If you are struggling financially, have to sell the home of a deceased relative who doesn't live nearby, or need to move out of state immediately, you may be less worried about maximizing the profit of your home sale and more worried about simply getting it off of your plate so that you can move on with your life. 

For some people, the convenience and ease of going to an iBuyer and getting rid of the home immediately - without dealing with open houses and sometimes stressful closing negotiations - far outweighs the extra money they would make by selling their home on the open market. 

It also allows sellers to avoid dealing with repairs and renovations prior to moving out.

 "Florida's weather is pretty brutal on materials - wood rot, roofs, etc. A lot of people just don't want to fool around with repairs. When they sell to an iBuyer it eliminates the need to do repairs," explains Doolittle.

Reviews of Jacksonville "We Buy Houses"-type Companies

There are many companies in the greater Jacksonville area that offer to buy homes for cash, including Mark Spain, Henry Buys Homes, and others. Here are two of the bigger names with reviews that highlight both the benefits and drawbacks of working with iBuyers to sell your home.

OfferPad:

“Pretty scammy business model on the sell side. Decent, not great initial offer. The inspection only found very minor issues. Suddenly they want $30k as a 'repair credit' but can't actually point to a repair that this would be crediting against. Take a hike; this is too much of a seller's market for these games.” - Michael B. via Yelp

“I sold my home with Offerpad 2 years ago and I had an overall pleasant experience… I would recommend them IF your home needs a lot of work and you don't have the resources or time to fix it up for selling. The home I sold to Offerpad was built in the 1970s.” - Rachel E. via Yelp 

OpenDoor:

“Their entire business model relies on undercutting the seller - you're paying a price for 'convenience.' If Opendoor is willing to buy your house, chances are that multiple buyers will compete for your house and you would make more money on the general market. You're not avoiding commissions, Opendoor still charges them, keeps them, and saves money buying your house. Then they turn around and resell the house on the general market." -Jordan P. via Yelp

“Smooth, easy, hassle-free. Eliminated showings. With 3 dogs and a cat, cleaning out for showings would have been almost impossible.” - Michael via Review.io

Houwzer Sells Houses Fast in Jacksonville 

If you’re looking for ways to profit more from your home sale while having a more streamlined experience, consider using Houwzer, a next-gen brokerage that offers full-service listing services for a flat fee of $5,000 (paid at closing). This includes everything a traditional brokerage provides - an experienced Realtor that helps you through every step of the transaction, professional photography, MLS and social media marketing, open houses, and more. 

Houwzer acknowledges that technology and modern efficiencies have reduced how much it actually costs to sell a home. The reviews speak for themselves: hundreds of past clients have given Houwzer an average score of 4.9/5 stars on Zillow and other online review sites.

If you’re looking to avoid intrusive buyer viewings and the uncertainty of a home sale’s closing timeline, though, Houwzer has a Convenience Offer that sellers can make use of - this is a cash offer at 5-7% below the home’s estimated value to cover closing costs. The Convenience Offer is different from an iBuyer offer, though, because you can use it as a backup to your traditional home sale. 

And if the home sells for a price over what Houwzer paid for it (minus expenses), they split the profit 50/50 with the home seller. You can cancel at any time, without charge (just poke around Offerpad reviews and you’ll see that cancellation fees are a major source of contention for iBuyers).

The Jacksonville Real Estate Market Has Never Been Stronger

The best time to sell to a We Buy Houses Jacksonville company is when the market is cool. That’s when you might genuinely struggle to sell your home within your ideal timeline - and if your home needs updates or repairs, you might find buyers constantly passing you over.

Today, though, the Jacksonville real estate market is hotter than ever - according to Redfin, the median sale price for homes has gone up +25.5% YoY and demand is high, with the average home going under contract at around 21 days, with most homes receiving their list price. You could sell a home in need of major work and renovations - so long as it’s priced accurately, it will probably sell fairly quickly. 

“Demand in the Jacksonville market is high - people from places like California, New York, New Jersey are selling similar homes there for millions of dollars, and can purchase almost the same house here for under $600k,” explains Doolittle. “A lot of people are also now working from home permanently, for companies that are based in other states and cities, and making those higher wages to match the cost of living in those places, but are living in Florida.”

Ultimately, opting not to bring your home to the open market is opting to leave money at the table - money you could use toward things you really need.

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