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Sure I guess so, but what value is Opendoor actually providing? They aren't making improvements to the home. They're hiding defects in order to artificially inflate the sale price.
I'm not involved in the housing market, but I understand that homes are selling extremely quickly and buyers are often forgoing inspections or surveys. Seems like Opendoor is taking advantage of this market dynamic.
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Originally Posted by uncchgrad
I agree. That sounds like what’s going on here. OD is like the roofing company that shows up in town offering great deals after a major hurricane. Only in this case they are manipulating hot housing markets.
iBuyers are cashing in on consumer distrust of agents, as well as consumer desire for convenience, and a fair amount of American lack of financial acumen.
Some folks selliing to iBuyers do well enough and are satisfied.
Some folks leave $5figures on the table so they don't have to clean or make repairs.
Listing agents for many iBuyers are wide open to complaint and suit for not doing proper disclosure of easily observed material issues.
Agents do NOT have the option to say, "No Representation."
My sis-in-law in Georgia has to sell a house in poor repair, and an i-flipper is a definite possibility if she cannot identify a local in-person flipper.
My sis-in-law in Georgia has to sell a house in poor repair, and an i-flipper is a definite possibility if she cannot identify a local in-person flipper.
iFlippers will probably pay better.
They do less repairs than legit flippers, and don't know how to price properties.
A real flipper has to be profitable, or they don't last long.
In this market is essentially safe to assume that if someone sells their home to opendoor (or any of the I-flippers) it is for one of two reasons:
A. I-flipper offered the owner a price close enough to what they could get if they put it on the open market that whatever difference it is worth it to not have to deal with marketing/showings/uncertainty (this is less common now that Opendoor specifically screwed a lot of people over when the pandemic started and cancelled many of their sales contracts). Essentially paying for the convenience.
B. Owner of home knows that it is in rough shape and willing to take less money for it to not have to disclose issues they (or rather, their licensed RE agent) would be required to if put on the open market.
In scenario A. When the move-in-ready (ish) home goes live on the market by said I-flipper; it is usually priced significantly over neighborhood comps.
In scenario B. Home goes on the market in lipstick-on-a pig condition (they've even toned down the lipstick recently; they aren't even painting the walls apartment beige and replacing the carpet with the c-grade warehouse grey stuff anymore!) priced relatively in-line with more move-in-ready comps.
In both scenarios; buyers in the open market are very wary of I-flipper houses and thus they are now viewed as an "inferior good". Zillow used to do a better job of marketing the properties to look like a more traditional listing but that has waned recently. Opendoor is computer-generated with obvious virtual staging and water-marks all over the pictures in an effort to stop the scammers.
I have one client who is a teacher trying to buy a townhome in Western Wake for under $250k. After 7 declined (competitive!) offers on traditional-sale homes; we toured 2 Opendoor and 1-zillow-owned listings this week that had all been sitting for over 30 days (an eternity in this market)... in hopes of finding something where she wouldn't be in a competitive situation....and all 3 had very obvious not-cheap-fix issues that she couldn't take on.
Didn't OD have some sort of deal with one of the builders, I think Lennar, "encouraging" people that were building new homes to sell to OD since they could be flexible on closing dates?
Agents with buyer clients, have you tried lowball offers on OD-owned homes? Especially if you have data on what other OD-owned homes end up selling for after many DOM?
I just received a ridiculously high emailed offer from Open Door and there is zero chance my house would appraise at that. Not moving this year, but I snorted when I saw it. Durham is popular but no, my two-bedroom house in a potentially up and coming though never hipster neighborhood is not worth over $320K. (would be nice)
I can definitely see the attraction of selling to companies like Opendoor especially if you have pets and/or small children at home. Trying to get the pets and children all packed up for showings can be difficult. I also don't think I could trust leaving a cat at home because I would be concerned with a door being left open while the prospective Buyer was looking around.
I wouldn't want to buy a home from one of those places though unless it was my dream home in my dream location AND I had enough money should it require lots of repairs. I kind of feel that way about all resales though regardless of who the seller is. However I may have to change my tune on that at some point.
I can definitely see the attraction of selling to companies like Opendoor especially if you have pets and/or small children at home. Trying to get the pets and children all packed up for showings can be difficult. I also don't think I could trust leaving a cat at home because I would be concerned with a door being left open while the prospective Buyer was looking around.
I wouldn't want to buy a home from one of those places though unless it was my dream home in my dream location AND I had enough money should it require lots of repairs. I kind of feel that way about all resales though regardless of who the seller is. However I may have to change my tune on that at some point.
The allure of using a company that will buy your home is the convenience.
I understand a seller who says he doesn't want the inconvenience of cleaning up their home but that takes a day or so. I understand a seller who says he doesn't want the inconvenience of having their home shown but nowadays, I can put a house on the market on a Thursday, have showings on Friday and Sat. and by Sunday, it is sold.
Many of these companies that buy your home offer market value at the start. After they do some inspections, they lower their offer.
I've had a few of my clients call me about using these companies. Most realized the "convenience" was costing them between $10,000 to $50,000. They then realized for a weekend of showings, they'd rather keep the $10,000 to $50,000 themselves! My clients are SMART!
I just drove by an Opendoor house on the way to an inspection. The grass was at least 18” high. Guess they’re cutting everything to the bone to try to lose less money.
Grass at the OD house next door definitely isn't 18", but the landscaper they hired left 1/2 of the back yard untrimmed.
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