The Cost of Selling to an “iBuyer”

  • July 17, 2019

CMG Image

In a busy market, selling your home through real estate startups that buy homes directly from buyers may be a tempting offer.  Startups like Knock, Offerpad, and Opendoor solicit bids from “iBuyers” willing to buy its customers’ homes.  A recent MarketWatch investigation found that sellers who sell their homes this way, net 11% less than sellers who sell their homes the traditional way on the open market.  Especially when fees and other costs are considered.  

Using data collected from 26 transactions throughout the Raleigh-Durham, Charlotte, and Atlanta metro areas, MarketWatch researchers were able to compile the following results.


iBuyer offers fall short of market potential


Atlanta Average

Charlotte Average

Raleigh-Durham Average

Actual sold price




Opendoor offer




Opendoor fee




Offerpad offer




Offerpad fee




Estimated customer net, Opendoor offer




Estimated customer net, Offerpad offer




Actual customer net, open market




Offerpad discount




Opendoor discount




Sources: MarketWatch calculations based on customer interviews, public records, and Knock company data.

Startups that connect home sellers to iBuyers typically offer a lower sales price, and often charge higher fees.  Knock charges a 6% fee for all homeowners, but Opendoor and Offerpad fees vary depending on the location, value of the home, and other factors. 

Home sellers who consider selling through one of these startups do so for the convenience factor.  However, working with a Realtor or real estate agent has distinct advantages.  Realtors have connections throughout the real estate community and early access to home listings through the MLS.  Your Realtor or real estate agent may connect you with a buyer faster than you think depending on their network.  Realtors and real estate agents will also assist with lengthy paperwork and walk you through the process, which can be especially advantageous if you are a first-time home seller.  If you are thinking about selling to an iBuyer through a startup versus working with a Realtor or real estate agent, get connected with a local agent first.  Remember, they don’t get paid until the sale of your home – it’s worth a conversation first!  


Sources: MarketWatch

Michael Diaz
Sales Manager
NMLS # 1414515
Branch NMLS # 1828011

Michael Diaz

PHONE: (954) 554-1938

CMG Image
© CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender with corporate office located at 3160 Crow Canyon Road, Suite 400, San Ramon, CA 94583 888-264-4663. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025; AK #AK1820; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company #MC.0001160; Massachusetts Mortgage Lender License #MC1820 and Mortgage Broker License #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; and Licensed by the Virginia State Corporation Commission #MC-5521. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. For information about our company, please visit us at www.cmgfi.com. To verify our complete list of state licenses, please visit www.cmgfi.com/corporate/licensing and NMLS Consumer Access (www.nmlsconsumeraccess.org).