The Instant Offer companies like Zillow, Open Door, Red Fin , and several others, advertise a new way to sell your home.  Low Commission, Hassle Free, Easy Sale, But they do not advertise the large fees they charge the Home Owners.  These Large Fees are where they make their money.

Below, I have a summary of a transaction of a recently closed home.  The actual numbers are very close, I rounded them to make it simpler to see.

Home Listed for $480,000 they were offered and sold home for $470,000,  sounds pretty good. But then the "Devil are in the Details"

- $13,000  ( Normal ) in commissions were paid to the listing realtor 

- $4,100    ( Normal ) in Title and escrow fees 

- $9,000 for repairs   ( Not Normal ) Buying Company charged the Seller this amount to cover repairs and updates.     ( the home was in good condition but had features that made it look dated, which is why the home had not sold after 180 days. ) 

- $46,000 in “SERVICE” fees  ( No way is this Normal ) the seller paid to the buying company these fees for buying their home. ( The buying company does not advertise they charge these Service Fees, but advertises low commission cost to the seller. )

After all was settled the seller walked away from the closing table with ;

$397,900 Net to seller.  Or about $72,000 in closing cost and Fees,    

 

After the sale, the home was re-listed at $483,000. With very few updates or repairs.

When it sells there will be

$14,000 in commission to buyers agent

$7,000 in commission to selling agent if they listed for 1.5%s

$4,100 in Title Fees

$1,500 in repairs ( using an average estimate )

$452,600  Net  to Instant offer company

Making a profit of $54,700,   that the original seller COULD have made if they sold using their own realtor

If this was a hard to sell home, the Home Owners could have dropped the price $25,000 and still walked away with $30,000 more in their pocket !!
Or put $25,000 in upgrades to make it sell better and keep more of the investment they have in their home. 

You can't "Get something for Nothing", and the Instant Offer Companies cannot sell the homes for more than they are worth, they make their profits from the seller's equity.

There is an Old Saying "Buyers Beware", but in the case of the Instant Offer companies, its  "SELLER BEWARE"