Rejected by an iBuyer? You’ve Got Options

February 25, 2020 | Michael Gifford Michael Gifford

Every industry feels the impact of modern technology, and real estate is no exception. Data and information-based technologies play a huge role in how some companies price the value of your home. iBuyers are shaking up the market with promises of quick offers based on responses to a few questions online. This instant offer model works if you don’t like dealing with real estate agents in person, and it can be a way to avoid a costly remodel to prepare your home to list on the market. 

But the new alternative isn’t foolproof. Some industry estimates suggest that up to 90 percent of home offers from iBuyers don’t hold up. This means high numbers of iBuyer rejections, leaving home sellers feeling hung out to dry. Thankfully, getting rejected by an iBuyer doesn’t mean you’re out of options. Read on to learn more. 

Red flags when dealing with iBuyers

Most iBuyer rejections result from issues found in the house. Unfortunately, the discovery of these issues doesn’t happen until the inspection a long way into the process. You have to invest a considerable amount of time working with an iBuyer before you’re certain they’ll purchase your home. 

iBuyers base their initial price on an algorithm, not the actual condition of your home. By answering questions online, you’re giving an iBuyer data that it can merge with local market information to programmatically create an initial offer for your home. This first estimate is likely close to market value because no other costs have been factored in yet. Other costs include fees, transaction costs, and closing costs, which add up quickly. For a breakdown of how to estimate these expenses, read our article on calculating net proceeds.  

The inspection of your house is what uncovers the potentially most expensive issues. Usually the iBuyer will deduct estimated repairs from your offer, leaving you with less money in your pocket. Depending on where you live, needed repairs found during the inspection may lead to rejection of the offer you thought you had in the bag. Some of the biggest issues include:

  • Un-permitted additions
  • Presence of septic tank rather than a sewer connection
  • Foundation issues
  • HOA restrictions 


It’s possible that you can make some of these repairs yourself, but they’re costly. Others are simply outside of your control. Regardless, an iBuyer rejection wastes a lot of valuable time and can put you in a precarious financial position.

Alternatives after a rejection

Thankfully, getting rejected by an iBuyer doesn’t mean you won’t be able to sell your home. There are plenty of options to consider, including ways to sell your house in as little as 10 days. 

If your house is market-ready, but you were using an iBuyer to save time, you might consider a discounted listing program to sell your home on the market at a lower price. Discounted listing programs often provide more limited real estate agent services in exchange for lower fees. Of course, the risk to using this approach is that if your house isn’t appealing to buyers or isn’t priced correctly, it could sit on the market for a while.

On the other hand, if you turned to an iBuyer because you have some financial challenges, you still have other options. Short sales can help homeowners who are upside down on their mortgage, and real estate attorneys can assist with probate or trust issues connected to the home. We’ve written previously about options for homeowners who are facing foreclosure

Perhaps the easiest, most worry-free alternative you can consider is selling your house off market to a cash buyer. These types of off-market homebuyers can offer a quick, algorithm-free sales process with fewer steps and lower fees.

Not all off-market buyers are iBuyers

While every iBuyer may be considered an “off-market buyer,” not every off-market buyer uses the iBuyer process for generating an offer. It’s important to understand the differences. In theory, all off-market buyers can save you the stress and time of having to repair, list, promote, and show your home to buyers. But companies vary greatly in the buying processes they follow, timelines, paperwork, and associated fees. 

As mentioned previously, iBuyers provide quick home offers with limited assessment of the physical state of your property. Should you want the benefits of working with an off-market buyer, without the lengthy and unpredictable iBuying process, companies like Sundae offer a different experience. Sundae provides transparent and reliable pricing, and compares favorably with other ways of selling your home when taking into account final net proceeds. Here are some of the key distinctions of working with an off-market buyer like Sundae. 

In-person home evaluation

iBuyers use an algorithm to make their first offer on your home. This price is based heavily on assumptions that are subject to change later. Sundae, on the other hand, does not provide an offer until a Market Expert makes an actual visit to your home. These experts have deep experience in real estate, renovation costs, and your local area. Working together with our team of valuation and construction analysts, they can make a realistic offer at the in-person visit. This leads to a much faster turnaround time to receive a finalized offer.

Transparency, honesty, and expertise

At Sundae, our mission is to help homeowners get the best outcome when selling a house that needs some love. Sometimes selling to Sundae will not produce the best outcome, and we have no problem telling you so. In fact, another benefit of providing an in-person cash offer is that our Market Expert can talk you through the offer, answer your questions, and provide expertise and perspective so you have all the necessary information to make your decision.

Reliable offers and less paperwork

An iBuyer’s initial offer doesn’t include transaction fees, closing costs, and repair expenses to address issues found during inspection. Right off the bat, you’re subtracting from the offer, which leads to a much lower price than you expected. While most iBuyers are honest about these deductions, their initial offer is sometimes so high that it distracts you from seeing the bigger picture.

Sundae’s initial offer price already factors in the cost of repairs to get your home market ready. It includes all transaction costs and fees. Relying on ground-level expertise results in higher accuracy, speeding up and simplifying the whole process for the seller. What you see is what you get. 

To learn more about how Sundae can help you sell your house, contact us today


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