Putting offers in on Unlisted Homes. (want some feedback) (incentive, appraisal, agent)

[theolivebranch]

Hello we recently built a tool that lets people put in offers on unlisted homes and would love some feedback.

The idea is to help folks have the best chance of getting their dream home even when its not in the market. With inventory levels being so low in many desirable neighborhoods this sort of strategy works but isn't usually that easy to execute. moderator cut: url removed
The tool works, but is still under development, and it can be found here: moderator cut: url removed

I wanted to ask if anyone would use our tool? What would be some of the things you would expect from such a tool? Obviously this tool is completely free and any feedback is greatly appreciated.

[jghorton]

It sounds like a good idea! - I've contacted people in neighborhoods and condos about whether they are interested in selling their property. I've also seen Realtors do this when they have buyers who are interested in buying in a certain area, where there are no homes available.

A non-binding offer seems to add credibility to a letter soliciting an interest in selling. The real test is going to be whether it works or not. (I've not had great success in buying based on the unsolicited letter approach).

-- I looked at your website, but couldn't quickly find details about the cost and whether one pays for submitting the offer - or if/when the offer results in a sale? -- You might want to consider more visuals and fewer words on your web landing page. The idea and tool is probably sound, but, those visiting your site need to see the advantages to them - quickly after arriving at your site.

[theolivebranch]

@jghorton - thanks for the fantastic feedback.

So the service is absolutely free to put in offers and I think we need to make that more clear and in reality we are trying to cut cost in the whole process so there is strong incentive from both the buyer and the seller to use the service. For example most fees would range between 5-6% for purchasing a home through traditional channels our goal is to try to bring that down to 2%.

Thanks again, for the feedback.

[2bindenver]

Practicing Real Estate Sales without a license is illegal in all 50 states. Closing costs run 8-10% - even if you cut out the brokerage firm, still have to pay everyone else.

[jackmichigan]

I don't understand why you think that a process which guarantees that people pay more than market value will be received favorably. Some may fall for it, but most probably won't.

You can't advertise that Sellers will always receive above-market offers* and not expect that Buyers will see that as a problem.


*That's an impossible condition, regardless.

[rrah]

Maybe I watch too much Shark Tank, but it's an idea with a limited market. In order for you to really make money you need a place with very low inventory. Markets also fluctuate.

You also are not actually finding unlisted homes for people. That is the most difficult part of the process. I can pay a lawyer to do the paper work for me and have peace of mind. For the most expensive purchase of my life I'm not going to trust some anonymous company on the internet.

The other issue, people are making offers on houses, sight unseen.

Generally nice looking website with a few user interface issues.

[theolivebranch]

@jackmichigan - thanks for the great feedback.

We will vet every non binding offer and reject offers that are obviously a waste of time for the home owner. Another thing to keep in mind is that most of the neighborhoods we are targeting almost all homes sell above market value, this is because inventory is very low. There are multiple bids and when it does sell the ultimate buyer will end up paying significantly above market rate. Our platform allows them to put in their best offer and negotiate down based on inspections and appraisals and other concrete facts. This allows the owner to sell their home without the cumbersome open houses and lots of strangers going through their doors.

@rrah - thanks for pointing out some good stuff.

I think you are correct is that we are limiting ourselves to certain markets but those are the most desirable neighborhoods in America. We actually believe, based on studies by Trulia and othe places, that it's going to be a sellers market for some time and we believe that's where we will thrive. Where inventory is low.

That sight unseen issue is very valid but we believe that because the offer is non binding and it's just to get the conversation started. If there are obvious problems with the home then you will obviously negotiate that out. Your telling the home owner that this is what I would pay if everything is great.

You do make a great point about discoverability of unlisted homes and that is our ultimate goal to get these home owners to keep their homes on our platform and keep receiving offers. We think that will help with discovery especially if we can onboard a good amount of home owners.

[LCTMadison]

I'm still waiting for how you are going to do this without obtaining a brokerage license...what you are doing would be illegal in my state without holding a real estate license issued by the state, and like 2bindenver said, that is pretty much the law in every state.

Your site states you will get them in touch with a licensed real estate broker, but unfortunately by the time you do that, you have already broken the law.

Also it looks like you are using Zillow valuation as the "recommended" for offers. That's nuts. I put my address in to "make an offer" on your site and the Zillow value came up. I will promise you, my house is worth much more than what Zillow states. What happens when Zillow undervalues a house and you have promised sellers above market value offers?

[theolivebranch]

Hey LCTMadison, thanks for that.

The site is started by folks who have those licenses, although at the moment we plan to only operate in a few states that we feel are the best markets to test the idea. I think we need to be clearer about the licenses and also about the fact that we plan on being agent friendly, meaning folks can bring their own agent.

Thanks for the feedback on the zillow offers, your 100% right that zillow understates in most markets. At the moment it's a placeholder while we build a data science team that will analyze these offers on a market by market basis, edit: valuing a home is hard which is why we will need to vet every non binding offer. Also keep in mind that we approve every offer before it goes out, so if we feel it's too low or a waste of time we have to reject it.

[creeksitter]

Anything that is anonymous feels like a waste of time. I receive form letters all the time and chuck them in the file.

If someone is searching for a house they should focus on one that appeals to them and leave a handwritten letter in the door. Or get the owner's address from the tax office if it's an investor. Say why you like about that particular house. Most important is don't be in a hurry to move.