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They have an interesting idea, i.e. provide a much easier path for a customer to move from their old house to a different house.
"Here's what Knock.com does:
– When a homeowner wants to sell, they plug in their information and get an estimate of its worth online, using the same sort of data that Zillow have compiled. An inspector comes out and confirms the price with an in-person visit.
Moderator cut: too long a quote, read TOS
Of course, it's easy to nitpick, but I think they have a cool idea.
There have been similar companies around for decades. "We buy ugly houses" comes to mind immediately. In an area I lived previously one agent/company claimed they would buy your house if they couldn't sell it within a time frame. Rarely do these marketing schemes result in a good price for the seller.
It's not been incredibly successful in the past. I don't expect this reinvention of the wheel will be incredibly successful. It's based on a false belief that an all cash offer will win or result in a lower price. I suspect in most of the country those so called bidding wars don't exist.
Most people on this forum understand that Zillow are not reliable information sources. To use that same data for value is pointless in many cases. I'm curious about the credentials of the so called inspector. My guess is that they are buying one's house at an undervalued price.
I won't knock them for trying, but the devil is always in the details. How much of a discount from the Seller do they need to make this work, and what other fees will a Seller need to pay them? Their model could make it easier for someone to sell in a pinch, but plenty of other buyers are willing to pay less than market value as well. If values are going to be based upon online estimates, coupled with an "inspector", there is good reason to be wary.
Most people on this forum understand that Zillow are not reliable information sources. To use that same data for value is pointless in many cases. I'm curious about the credentials of the so called inspector. My guess is that they are buying one's house at an undervalued price.
Quote:
Originally Posted by jackmichigan
If values are going to be based upon online estimates, coupled with an "inspector", there is good reason to be wary.
I'm not defending this model as I'm not really a fan of it for various reasons - not sure how sustainable and scalable across different types of markets it is.
But I think we're too hung up on the 'inspector' and Zillow or whatever. It's clear that it's just someone determining the price that the company is offering for the house. Who cares if they get their price from rolling a dice or from Zillow or from a 17 year old with a clipboard and a pencil behind his ear.
It's no different from anyone making an offer on your house. Their credentials and methodology of deriving the offer price does not matter. A smart seller always has a good idea of what their home is worth.
If a seller understands that he can get 300-310 for his house on the open market and a monkey with a clipboard comes by and says that he'll pay you 290 cash for it, then you can decide whether that fast, convenient sale is worth the 10-20k sacrifice vs selling it on the open market (obviously simplified as I'm not considering commission, etc). Like any offer, i'm really not too bothered by how they came up with their offer price. That's their business. Maybe that month they already have too many projects going and the boss says to lower all offers by x%. Or they need to show investors growth and are sacrificing margins to get volumes in the door. Who cares? That's their right to do that and the seller's right to not accept it.
Am I missing something here with all the worry about how they derive their offer prices?
I'm not defending this model as I'm not really a fan of it for various reasons - not sure how sustainable and scalable across different types of markets it is.
But I think we're too hung up on the 'inspector' and Zillow or whatever. It's clear that it's just someone determining the price that the company is offering for the house. Who cares if they get their price from rolling a dice or from Zillow or from a 17 year old with a clipboard and a pencil behind his ear.
It's no different from anyone making an offer on your house. Their credentials and methodology of deriving the offer price does not matter. A smart seller always has a good idea of what their home is worth.
If a seller understands that he can get 300-310 for his house on the open market and a monkey with a clipboard comes by and says that he'll pay you 290 cash for it, then you can decide whether that fast, convenient sale is worth the 10-20k sacrifice vs selling it on the open market (obviously simplified as I'm not considering commission, etc). Like any offer, i'm really not too bothered by how they came up with their offer price. That's their business. Maybe that month they already have too many projects going and the boss says to lower all offers by x%. Or they need to show investors growth and are sacrificing margins to get volumes in the door. Who cares? That's their right to do that and the seller's right to not accept it.
Am I missing something here with all the worry about how they derive their offer prices?
A concern would be that not everyone really knows what their property is worth, elderly people especially. If a Zestimate is presented as a factual market value, followed up by the opinion of an "inspector" who works for the company but may be presented as an independent third party, that could sway the unsuspecting. I've known of a few cases in which knowledgeable investors have taken advantage of older, less knowledgeable, property owners. I'm just saying that caution is in order for anyone who would consider such an arrangement. A lot of people tend to avoid hiring lawyers due to the expense, but some property owners definitely need someone looking out for their interests. Again, the story didn't relay the details and details are important.
A concern would be that not everyone really knows what their property is worth, elderly people especially. If a Zestimate is presented as a factual market value, followed up by the opinion of an "inspector" who works for the company but may be presented as an independent third party, that could sway the unsuspecting. I've known of a few cases in which knowledgeable investors have taken advantage of older, less knowledgeable, property owners. I'm just saying that caution is in order for anyone who would consider such an arrangement. A lot of people tend to avoid hiring lawyers due to the expense, but some property owners definitely need someone looking out for their interests. Again, the story didn't relay the details and details are important.
I agree with your concern and that's exactly why I took the position that I did.
There are presumably many factors that are used to derive the offer price that a company like this will present, not just some factor of the market value.
As soon as you start asking about the credentials of the 'inspector' or the accuracy of any estimation tools and methodology, it might suggest that the offer price is supposed to be the market value. Better just to not worry about any of that and treat it as you would any offer. Trying to discuss any sense of "accuracy" with regard to the offer price presents more problems and will tend to mislead more.
Sellers must get third party assessments of the likely market value rather than worrying about what credentials the person preparing the Knock offer has. So what if the 'inspector' introduces himself as having been a licensed, professional appraiser for 40 years. Does that mean that the seller should have more confidence that Knock's offer price is aligned to market values? No, of course not. Likewise, using Zillow or whatever should not suggest the opposite. It's faulty logic to think that way.
This is why it's my view that none of that matters and the price offered should not be evaluated to any degree on how they derive their offer prices or the credentials or accuracy of any humans or automated tools involved in that process. That's irrelevant and just creates more opportunity for consumers to misunderstand and be misled.
I won't knock them for trying, but the devil is always in the details. How much of a discount from the Seller do they need to make this work, and what other fees will a Seller need to pay them? Their model could make it easier for someone to sell in a pinch, but plenty of other buyers are willing to pay less than market value as well. If values are going to be based upon online estimates, coupled with an "inspector", there is good reason to be wary.
Good pun.
But I'd question the model, if not "knock" it, if I accept the article as accurate.
Citing use of AVM, "pop appraisal," data to arrive at a proposed price, confirmed only by the company's "inspector," with no indication of involvement of a licensed, independent appraiser leads me to think the target market is precisely the unaware, unsophisticated, and naive owner.
The ethics of the company immediately are under a red flag.
Using pop appraisal as an opener, at best, is a lead generation model, with hopes of naive homeowners opening their doors to slick, hard-closing sales weasels.
Good pun.
But I'd question the model, if not "knock" it, if I accept the article as accurate.
Citing use of AVM, "pop appraisal," data to arrive at a proposed price, confirmed only by the company's "inspector," with no indication of involvement of a licensed, independent appraiser leads me to think the target market is precisely the unaware, unsophisticated, and naive owner.
The ethics of the company immediately are under a red flag.
Using pop appraisal as an opener, at best, is a lead generation model, with hopes of naive homeowners opening their doors to slick, hard-closing sales weasels.
You seem to be completely missing the point that a company like this is not going to offer you market value anyway. Let them use what they want to come up with their offer. It's going to be below market value anyway. Seller must beware just like with any offer. No getting around that. Better that they don't try to couch it as some kind of independent licensed appraisal as that will only confuse naive sellers.
Last edited by just_because; 03-04-2018 at 01:17 PM..
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