‘iBuyers’ offer below-market prices, the appeal of a quick sale

News Spring House Hunt
10 Crandall St. in Roslindale (seen at top, above, and below) sold in February for $620,000. Jonathan Shoemaker

Putting a house on the market disrupts the owners’ lives. They have to paint the walls; ensure everything is clean, neat, and staged; and be ready to vacate on short notice for showings. Kids and pets compound the hassle, which can go on for weeks or even months.

There’s a simple alternative many people haven’t considered — or haven’t heard of — but it’s becoming more popular. Investors called “iBuyers’’ (short for instant buyers) make cash offers with no contingencies. They are often more flexible on closing dates; and some even assist with moving costs or let owners leave behind whatever belongings they don’t want to take with them.

The investors usually buy the property for less than market value, then they make repairs, do cosmetic work, and put the house back on the market, expecting to sell it for a profit. Sellers net less money, but they get a simplified, fast, easy sale on their terms and timeline.

Anthony Lamacchia, broker/owner of Lamacchia Realty, got into the iBuyer business when he started his Offer Now program at the end of 2018. He’s said there is a lot of interest, but the program isn’t right for everyone. For those sellers who don’t accept his offer, he’s happy to list their property for sale through his brokerage.

“I assumed the people who would be interested in our program would be people in distress, but that’s not been the case,’’ Lamacchia said. “It’s everyone. What attracts them is convenience. We just bought one in Waltham where the heirs who inherited it … just wanted to close quickly. We try to adapt to their closing date as closely as possible.’’

Lamacchia said he generally pays owners 75 percent to 92 percent of the home’s market value, though the actual figure depends on how much work the property needs. He doesn’t charge a commission. (By comparison, the typical commission is 5 percent to 6 percent of a home’s sale price.) He closes pretty much whenever the seller wants to, he said, and ideally, his crews get the house back on the market in 30 to 45 days.

He’s had a handful of people accept his offer, he said. “It’s similar to when you buy a new car and trade your old one in with the dealer. We all know we could sell it directly to someone else for more money, but we take the dealer’s offer because it’s good enough and we don’t want to do the work of taking out ads and showing it to people.’’

Lamacchia’s first Offer Now customer was Mark Horner. Horner said he was acting on behalf of his sick and elderly mother, who bought the family home in Watertown in the 1970s and never updated it. His mother had recently moved in with him and needed around-the-clock care, so Horner put the house on the market with another agent in October 2018.

“We put it on for $595,000 and didn’t get any bites, so we dropped the price to $550,000,’’ Horner said. “I first spoke with [Lamacchia agent] Mike McGrory last February, then I decided to take my house off the market, accept their offer’’ of $440,000. They closed in March, and the property sold on May 21 for $638,000, according to Lamacchia.

“They put a ton of work into it,’’ Horner said.

Lamacchia Realty’s Offer Now program is in the middle of overhauling this Waltham home, opening up the space. —Anthony Lamacchia
. —Anthony Lamacchia

Horner, who lived in North Attleborough at the time, said he is a disabled veteran who didn’t have the resources to renovate the house. He said McGrory was easy to work with, and he’d recommend the process.

The term “iBuyer” may be fairly new, but the concept isn’t.

Tom Cafarella, co-owner of Ocean City Development, has been buying homes, updating them, and reselling them since 2009, before the term “iBuyer’’ existed. He said he buys six to 10 properties a month for anywhere between 70 and 100 percent of their market value. He said most people who contact him want top dollar for their home. In that case, he also owns Cameron Real Estate Group and can list the property on the Multiple Listing Service. In some circumstances, he said, the only person who could get the deal done is an investor.

“We recently bought a multifamily where the owner had equity, but the tenants weren’t paying the rent,’’ Cafarella said. “He wanted to sell, but he also wanted to stay. So we structured a deal where we bought it, converted it into condominiums, gave one unit to the owner, and sold the rest.’’

Karen O’Toole felt overwhelmed when she inherited the single-family home in Roslindale where three generations of her family had lived for 70 years. The house was dilapidated and jam-packed with possessions. In the stacks of mail, she found several letters from Ocean City Development and gave them a call in April 2018.

“A woman came out and made me a cash offer on the spot,’’ O’Toole said. “She said I could take as long as I needed to empty the house. I countered her offer, and we arrived at a fair number. I feel like I was treated very respectfully and fairly.’’

She spent the summer emptying the house. They closed the deal in September. Ocean City paid $300,000 for the home, made major renovations, then sold it in February for $620,000 — more than $70,000 over the asking price.

“The house needed everything; a roof, siding, windows, wiring,’’ she said. “There were raccoons living in it. The porch was falling off, and the kitchen was nonexistent. They put an extra half bath in it. I just looked at the photos and it’s beautiful.’’

The iBuyer concept is taking off in certain markets where large national companies like Redfin, Zillow, and Opendoor have jumped in. They don’t operate iBuyer programs in New England.

David Zanaty, general manager of Opendoor’s eastern division, said the company buys roughly 1,500 homes a month at market value in the 20 markets in which it operates, then charges sellers a fee ranging from 6 percent to 13 percent.

Zanaty said Greater Boston is on their radar.

“Boston is older, more expensive, and the data is harder to capture,’’ Zanaty said. “It also has cold weather complexities we have to figure out over time.’’

With Boston-area home values still on the rise — the median sales price for a detached single-family home in Greater Boston hit $618,000 in April, according to the Greater Boston Association of Realtors — there’s plenty of incentive for the large national firms to figure out the complexities of the Boston iBuyer market.

Attorney David J. Mahlowitz, managing partner of Mahlowitz & Kanarek, cautions buyers that purchasing a home from a developer carries the same risk of buying one from any other person.

“When you buy a house in Massachusetts, you buy it in ‘as is’ condition,’’ Mahlowitz said. “It’s like anything else: Make sure you’re dealing with a qualified, reputable developer. And make sure you hire a thorough, reputable home inspector. It’s your only opportunity for due diligence. Also, you can always ask a developer for a one-year warranty.

“They’re not required to give you one, but you should ask.’’

Jim Morrison is the author of “Home Buying in 30 Minutes” (©2018, ¡30 Media Corp.) and such stories as “How to find homes before they hit the market.“’ Send comments to Subscribe to the Globe’s free real estate newsletter — our weekly digest on buying, selling, and design — at Follow us on Facebookand Twitter @globehomes.

Correction: Because of incorrect information provided to the Globe, a previous version of this story gave an incorrect figure for the prices Opendoor offers. The company pays between 6 percent and 13 percent below market value.