Sundae review: What it is, how it works

Are you worried about selling your home due to its poor condition? Sundae is an online real estate marketplace that specializes in helping homeowners with dated or damaged homes sell their properties, without having to do any repairs. Unlike an iBuyer, though, Sundae does not actually buy homes itself — instead, it connects the homeowner with local investors, who bid via an auction. Here’s more about how Sundae works.

What is Sundae?

Sundae helps homeowners sell their property as-is. Like other homebuying companies, it provides cash offers and eliminates the need to hire a real estate agent, so you don’t have to prepare the home to list, show it to prospective buyers, or pay a Realtor’s commission.

However, there are key differences. For one thing, Sundae is a marketplace, not a homebuyer: It’s a platform that allows homeowners to sell their properties to investors in an auction-style format. The company creates a “listing” for your home that it puts in front of a network of hundreds of investors.

Secondly, many fix-and-flip companies will not take on a home that needs very extensive repairs because they need to make money on the flip. But Sundae says with them, it doesn’t matter how dated or damaged a home is. In fact, the company prides itself on helping customers who have been rejected by iBuyers because their home needs too much work.

How does it make money?

Home sellers do not pay a fee to use Sundae. Instead, it generates earnings through its network of investors, who are charged to use the platform. The company says it has more than 20,000 investors across the country. They pay a commission to Sundae when they buy a property on the platform.

How does Sundae work?

Here’s a breakdown of how selling with Sundae works:

1. Reach out: Use the online form or call the number listed on the website. A representative will be in touch to assess the situation and schedule the next step.
2. Create a “property profile”: Sundae makes an in-home visit to do the legwork needed to prepare your property’s listing for auction. The company inspects the home, takes photos and creates a floor plan and 3D tour. It will also prepare a preliminary title report, and you will have to fill out any legally required disclosure forms. Note that, while this might sound similar to a traditional real estate listing, a Sundae listing is off-market: It will be seen only by its network of investors.
3. Review auction bids: Once Sundae lists a home on its marketplace (after the inspection and disclosures are complete), investors have a four-day window to bid on it. After those four days, the highest offers are presented to the seller, who then has three days to accept (or reject). The company says sellers typically receive 22 or more offers.
4. Sell your home: When you accept an offer, Sundae will assign you a closing manager to handle the process of the close. The deal can close in as little as 10 days or up to 60 days.

Where does Sundae operate?

Sundae currently operates in 11 markets across five states:

• California: Inland Empire, Los Angeles, Oakland, Orange County, Sacramento, San Diego
• Georgia: Atlanta
• Nevada: Las Vegas
• Texas: Dallas–Fort Worth, Houston
• Washington: Seattle

Sundae pros and cons

Pros:

1. No repairs needed: Sundae sellers do not need to spend any time or money making updates or repairs to their home — even if it’s in very poor condition.
2. Buyer competition: Listings are put in front of hundreds of local investors, who bid against each other for the chance to buy your home. As the company says, “Competition drives multiple offers and a fair price on our marketplace.”
3. No fees or commissions: Homeowners do not pay fees or closing costs to sell with Sundae. (They are still required to pay the outstanding mortgage balance and any applicable HOA fees, though.) And because you’re not selling on the traditional real estate market, there are no Realtor fees to cover.
4. Fast closings: Sundae offers fast closings, which can be a big help if you’re anxious to sell in a hurry. You can close in just 10 days or within 60 days if you need more time.

Cons:

1. Limited coverage: Sundae only operates in five states, mostly in the West. If you’re outside of the coverage area, you’ll have to look for other options.
2. Potential for low offers: Homes are sold as-is, and homes in very poor condition are encouraged, so don’t expect top-dollar offers. In addition, while sellers do not pay fees to Sundae, buyers do — Sundae investors pay the company a commission when they buy a property, which is deducted from their gross offer.
3. Waiting period: If you sell to an iBuyer or a cash homebuying company, you might get an offer in just 24 hours. With Sundae, the auction process takes four days, and then the seller gets another three days to review bids and decide.
4. Better for worse-quality homes: While an auction-style sale to the highest bidder might be a great option for homes in serious disrepair, it might not be the best option for a home that’s not as bad off. If your home is in fair condition, even if it’s not pristine, you might make more money with a traditional sale.

Sundae vs. selling with a real estate agent

Sundae is a fast way to sell your home without involving a real estate agent. That means no commission to pay and no need to prepare the home for a traditional sale on the open market. However, there are definite benefits to selling with an experienced real estate agent who knows your market well. A listing agent’s job is to get you the best possible deal on your sale, both financially and in terms of conditions and terms. In addition, agents can guide you through the often-complicated process, making sure your transaction moves smoothly and handling any hiccups along the way.

Sundae vs. other alternatives

Sundae is not an iBuyer. Companies like Offerpad and Opendoor also buy homes for cash and operate very quickly, but they are buying the home directly — Sundae is a marketplace, not a buyer. It connects sellers with buyers, who compete against each other. Similarly, cash homebuyers like We Buy Houses and HomeVestors also make direct offers on homes.

These companies typically only purchase properties in need of relatively minor fixes, because they need to consider the cost of the repairs and how much they can make on a resale. In addition, the super-speedy cash offers provided by these companies are often contingent on a home inspection, and can change after the inspection is completed. Sundae’s investor offers are typically non-contingent, so they won’t change after the fact.

Next steps: Should I use Sundae?

If you are located in a market Sundae operates in and your home is in poor condition, Sundae could be a good option for you. Investors are looking for these types of homes, and the company can reach more of them than you could on your own. However, if your home is not in very bad shape, Sundae is probably not the best way to maximize your profit. Reach out to a local real estate agent to assess how much your house is worth and how much work you’d have to do to put its best foot forward for potential buyers.