# What Are iBuyers and How Do They Work? By Opendoor Editorial Team | 2019-07-12 > Learn how real estate agents are expanding their offering and serving more clients with iBuyers. ## Key Takeaways # What Are iBuyers and How Do They Work? An iBuyer is a real estate company that uses technology to make [fast cash offers](https://www.opendoor.com/articles/sell-your-house-for-fast-cash-with-Opendoor) on homes, letting sellers skip the traditional listing process entirely. The name comes from "instant buyer" — and that speed is the whole point. Whether you're [relocating on a tight timeline](https://www.opendoor.com/articles/how-to-sell-your-house-fast-complete-guide) or simply want to avoid the hassle of showings, iBuyers offer a different path to selling your home. Below, we'll cover how the process works, what fees to expect, and how to decide if this approach fits your situation. [Get your offer](#) ## What is an iBuyer in real estate An iBuyer, short for "instant buyer," is a real estate company that uses technology to make fast cash offers on homes. Rather than listing your home, hosting showings, and waiting weeks or months for the right buyer, you can sell directly to an iBuyer and close on your timeline. The company uses algorithms and local market data to calculate an offer, often within 24 to 48 hours of your request. The concept is straightforward: iBuyers purchase homes directly from sellers, make minor repairs or updates, then resell the properties on the open market. It's a different path than working with a [traditional real estate agent](https://www.opendoor.com/articles/how-real-estate-agents-work-with-ibuyers), though both can get your home sold. For sellers who value speed and certainty over squeezing out every last dollar, iBuying offers a compelling alternative. You're trading the possibility of a bidding war for a guaranteed cash offer and a closing date you control. ## Top iBuyer companies The iBuyer market has changed quite a bit in recent years. Some big names have stepped back, while others continue to grow. Here's a look at the major players still active today. ### Opendoor Opendoor launched in 2014 and pioneered the iBuyer model. The company operates across dozens of U.S. markets and gives sellers a choice: accept a cash offer or list your home with Opendoor as a backup plan. This flexibility lets homeowners explore the open market while still having a guaranteed offer in their back pocket. ### Offerpad Offerpad entered the market in 2015 and competes head-to-head with Opendoor in many cities. The company provides cash offers along with extended move-out windows, which can help if you need extra time to find your next place. ### Orchard Orchard blends iBuying with a trade-in program. If you're buying and selling at the same time, Orchard can help you make a stronger, non-contingent offer on your new home while handling the sale of your current one behind the scenes. ### Knock Knock takes a different approach. Instead of buying your home outright, Knock offers bridge financing through its "Home Swap" program. This lets you buy your next house before selling your current one, which removes the stress of juggling two transactions at once. | **iBuyer** | **Primary service** | **What sets it apart** | | Opendoor | Cash offers and listing options | Flexibility to choose your selling path | | Offerpad | Cash offers | Extended move-out periods | | Orchard | Trade-in program | Buy-before-you-sell support | | Knock | Bridge financing | Home swap program | ## How the iBuying process works Selling to an iBuyer follows a predictable path. Here's what each step looks like. ### 1. Request a cash offer online You start by entering your address on the iBuyer's website or app. Then you answer a few questions about your home's condition, age, and features. The whole process takes about five to ten minutes. ### 2. Receive your offer The iBuyer's [algorithm crunches your home's details](https://www.opendoor.com/articles/technology-trends-that-make-home-buying-and-selling-easier) alongside recent sales in your area. Depending on the company, you might see a preliminary offer within minutes, or it could take a couple of days. ### 3. Schedule a home assessment If the offer looks interesting, the iBuyer sends someone to walk through your home. This person checks that the information you provided matches reality and notes any repairs that might affect the final price. After the walkthrough, you'll receive an updated offer that accounts for any repair costs. ### 4. Choose your closing date Here's where iBuying really shines. Because there's no mortgage approval to wait for, you can often pick a closing date that fits your schedule. Whether you want to close in two weeks or two months, you have options. ### 5. Close and get paid The closing itself moves quickly. The iBuyer's title and escrow partners handle the paperwork, and you receive your funds shortly after signing. No waiting around for a buyer's loan to fund. ## What iBuyers charge in fees Convenience has a cost. Understanding how iBuyer fees work helps you compare your options clearly. ### Service fees iBuyers charge a service fee, typically [between 6 and 8 percent](https://www.bankrate.com/real-estate/ibuyers-vs-realtors/) of the sale price. This fee covers the convenience of a fast, certain sale. Rates vary by company and market, so requesting offers from multiple iBuyers gives you a better sense of what to expect. ### Repair costs After the home assessment, the iBuyer deducts estimated repair costs from your offer. Some sellers find the repair estimates reasonable. Others feel they're on the high side. Either way, you avoid the hassle of coordinating contractors yourself. ### How iBuyer fees compare to agent commissions At first glance, iBuyer fees might seem higher than traditional agent commissions, which typically run [5 to 6 percent](https://www.bankrate.com/real-estate/ibuyers-vs-realtors/). But a traditional sale involves more than just commissions. You'll also pay [closing costs, potentially make repairs](https://www.opendoor.com/articles/how-much-does-it-cost-to-sell-a-house), and possibly offer seller concessions to close the deal. When you add everything up, the total cost of selling to an iBuyer can be comparable to a traditional sale. The key differences come down to what you're paying for: - **Service fee:** The iBuyer's charge for providing a fast, guaranteed sale - **Repair costs:** Deductions based on the home assessment findings - **No listing agent commission:** iBuyer sales typically eliminate this cost - **Standard closing costs:** Title insurance, escrow fees, and similar expenses still apply, typically [1% to 2%](https://www.homelight.com/blog/what-is-ibuyer-real-estate-guide/) of the sale price ## Pros and cons of selling to an iBuyer Every selling option involves trade-offs. Here's an honest look at what iBuying offers and what it doesn't. ### Pros of iBuying The advantages center on speed, certainty, and simplicity: - **Speed:** You can close in days or weeks instead of months - **Certainty:** A cash offer removes the risk of a [buyer's financing falling through](https://www.opendoor.com/articles/why-do-pending-home-sales-fall-through) - **Convenience:** No showings, no open houses, no staging - **Flexibility:** You pick your closing date - **Simplicity:** One buyer, one transaction, fewer moving parts ### Cons of iBuying The potential downsides are worth weighing: - **Lower offer:** Cash offers often come in below what you might get on the open market - **Fees and deductions:** Service fees and repair costs reduce your net proceeds - **Limited eligibility:** Not all homes or markets qualify - **No bidding wars:** You won't benefit from multiple buyers competing for your home ## iBuyers vs traditional home sales The choice between an iBuyer and a traditional sale comes down to what matters most to you: certainty or maximum price. | **Factor** | **iBuyer sale** | **Traditional sale** | | Timeline | Days to weeks | Weeks to months | | Showings | None | Multiple | | Offer certainty | Guaranteed cash | Depends on buyer financing | | Repairs | Deducted from offer | Negotiated or completed before listing | | Closing date | You choose | Buyer-dependent | A traditional sale might put more money in your pocket if your home is in great shape and the market is hot, though it typically takes [45 to 60 days](https://www.realestatewitch.com/how-long-to-sell-house/) from listing to closing. But that higher price comes with uncertainty. ## iBuyers vs cash home buyers and investors You might be wondering how iBuyers differ from "we buy houses" signs you see around town. The distinction matters. Traditional cash buyers and house flippers typically target distressed properties. They make lowball offers because they're looking for deep discounts to maximize their profit after repairs. iBuyers operate differently. They use technology to make market-based offers on homes in good condition. Their pricing tends to be more transparent, with detailed breakdowns showing how they arrived at the number. While you probably won't get top dollar, the gap between an iBuyer offer and fair market value is usually smaller than what a traditional investor would offer. ## Who should consider selling to an iBuyer iBuying works well for sellers in certain situations. You might be a good fit if you're: - **Relocating for work:** A set timeline means you can't wait for the perfect buyer - [**Buying and selling at the same time**](https://www.opendoor.com/articles/how-to-sell-and-buy-a-house-at-the-same-time)**:** Avoiding double mortgages or contingent offers simplifies everything - **Looking for convenience:** Skipping the prep work, staging, and showings appeals to you - **Prioritizing certainty:** A guaranteed offer matters more than maximizing your sale price If getting the highest possible price is your top priority and you have flexibility on timing, a traditional sale might serve you better. But for many sellers, the certainty and simplicity of an iBuyer offer outweighs the potential for a slightly higher price elsewhere. ## Get a cash offer for your home The best way to see what an iBuyer will pay is to request an offer. You can compare it against what you might get on the open market and decide from there. [Get a free, no-obligation cash offer from Opendoor](https://www.opendoor.com/address-entry) to explore your options. [Get your offer](#) ## FAQs about iBuyers ### What types of homes do iBuyer companies purchase? Most iBuyers focus on single-family homes in good condition within certain age and price ranges. Condos, townhomes, and homes needing major work may not qualify. Requirements vary by company and market. ### Can you negotiate an offer from an iBuyer? iBuyer offers are based on algorithmic valuations, so there's less room for negotiation than in a traditional sale. That said, you can sometimes discuss repair cost adjustments after the home assessment if you disagree with the estimates. ### How long does it take to close with an iBuyer company? Closing timelines are typically much faster than traditional sales. Many iBuyers can close within two to three weeks, though you can usually extend the timeline if you need more time to move. ### Do iBuyers purchase homes that need major repairs? Most iBuyers prefer homes in good condition. Properties requiring significant structural or mechanical work often don't qualify. If your home needs major repairs, a traditional cash buyer or investor might be a better fit. ### Does Zillow still offer iBuying services? Zillow exited the iBuying market in 2021 and shut down its Zillow Offers program. The company cited challenges with accurately predicting home prices. ### Is Redfin still an iBuyer? Redfin closed its RedfinNow iBuyer program in 2022. The company no longer purchases homes directly from sellers but continues operating as a real estate brokerage. | **Supported Locations** | | | **Cities / Areas** | **States** | | [Columbia](/sell/columbia_sc), [Columbus](/sell/columbus_oh), [Corpus Christi](/sell/corpus_christi_tx), [Detroit](/sell/detroit_mi), [East Texas](/sell/east_texas), [El Paso](/sell/el_paso), [Florida Panhandle](/sell/florida_panhandle), [Greensboro](/sell/greensboro_nc), [Greenville](/sell/greenville_sc), [Indianapolis](/sell/indianapolis_in), [Kansas City](/sell/kansas_city), [Killeen](/sell/killeen_tx), [Knoxville](/sell/knoxville_tn), [Las Vegas](/sell/las_vegas), [Little Rock](/sell/little_rock_ar), [Louisville](/sell/louisville_in_ky), [Memphis](/sell/memphis_tn), [Miami](/sell/miami_fl), [Milwaukee-Waukesha](/sell/milwaukee_waukesha_wi), [Minneapolis](/sell/minneapolis), [New Orleans](/sell/new_orleans_la), [New York & New Jersey](/sell/new_york_new_jersey), [Northern Colorado](/sell/northern_colorado), [Oklahoma City](/sell/oklahoma_city_ok), [Omaha](/sell/omaha_ne), [Philadelphia](/sell/philadelphia_pa), [Pittsburgh](/sell/pittsburgh_pa), [Portland](/sell/portland), [Prescott](/sell/prescott_az), [Reno](/sell/reno_nv), [Richmond](/sell/richmond_va), [Salt Lake City](/sell/salt_lake_city), [San Antonio](/sell/san_antonio), [Seattle](/sell/seattle_wa), [San Francisco Bay Area](/sell/sf_bay_area), [South Texas](/sell/south_texas), [Southwest Florida](/sell/southwest_fl), [St Louis](/sell/st_louis), [Tucson](/sell/tucson), [Tulsa](/sell/tulsa_ok), [Virginia Beach](/sell/virginia_beach_va), [West Texas](/sell/west_texas), [Western New York](/sell/western_ny) | [Alabama](/sell/alabama_other), [Arkansas](/sell/arkansas_other), [California](/sell/california_other), [Colorado](/sell/colorado_other), [Connecticut](/sell/connecticut_other), [Delaware](/sell/delaware_other), [Georgia](/sell/georgia_other), [Idaho](/sell/idaho_other), [Illinois](/sell/illinois_other), [Indiana](/sell/indiana_other), [Iowa](/sell/iowa_other), [Kansas](/sell/kansas_other), [Kentucky](/sell/kentucky_other), [Louisiana](/sell/louisiana_other), [Maine](/sell/maine_other), [Maryland](/sell/maryland_other), [Massachusetts](/sell/massachusetts_other), [Michigan](/sell/michigan_other), [Minnesota](/sell/minnesota_other), [Mississippi](/sell/mississippi_other), [Missouri](/sell/missouri_other), [Montana](/sell/montana_other), [Nebraska](/sell/nebraska_other), [Nevada](/sell/nevada_other), [New Hampshire](/sell/new_hampshire_other), [New Mexico](/sell/new_mexico_other), [New York](/sell/new_york_other), [North Carolina](/sell/north_carolina_other), [North Dakota](/sell/north_dakota_other), [Ohio](/sell/ohio_other), [Oklahoma](/sell/oklahoma_other), [Oregon](/sell/oregon_other), [Pennsylvania](/sell/pennsylvania_other), [South Carolina](/sell/south_carolina_other), [South Dakota](/sell/south_dakota_other), [Tennessee](/sell/tennessee_other), [Utah](/sell/utah_other), [Vermont](/sell/vermont_other), [Virginia](/sell/virginia_other), [Washington](/sell/washington_other), [West Virginia](/sell/west_virginia_other), [Wisconsin](/sell/wisconsin_other), [Wyoming](/sell/wyoming_other) | --- *Originally published at [https://www.opendoor.com/articles/how-real-estate-agents-work-with-ibuyers](https://www.opendoor.com/articles/how-real-estate-agents-work-with-ibuyers)*