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Neither Zillow or OpenDoor are in my area and I'd sell to them in a heartbeat. I have a house I need to unload quickly, but I'm not willing to give it away. I live in a county that is larger than the whole state of Rhode Island with a population of 350,000, growing by leaps and bounds with no housing available, and they're not here?
Just found out they aren’t in my area either. I live outside Washington DC which is a pretty strong market too. I just wanted to see what they would offer, to see if it would be worth it to save the hassle of selling the house the traditional way. Oh well. I guess the traditional way is my only choice.
There might be money to be made in the missing realtor commissions. Recorded selling prices do not adjust for the amount of commission paid. Zillow pocketing fees on both ends (purchase and sale) that usually go to third party brokers might be enough to squeak a profit out even thought the recorded prices might not look like it. Thinking out loud. Honestly don't know.
I have to wonder if selling to these companies is worth it. I am tempted by the idea of just getting a quote and taking the cash offer if it seems fair. It might almost be a wash too price-wise, but a lot simpler for me. I know they charge more of a commission (I just looked it up). For my house, that ends up being an additional $8K or so than if I went with an agent and sold the conventional way. But if I sell the conventional way, I probably would end up having to spend that $8K on all the cleaning and prep projects you have to do to get a house for the market.
It's worth it. We just sold one. They bought it for 60% more than it cost 7+ years ago. Bf did a video tour for them, they sent someone to inspect the outside (we weren't even there for that) and they made an offer almost right away. They paid almost 30k more for our house than they paid for an exact same model on our street just the month before. 2 trips to the attorney, who handled all the paperwork, 1 walk around inside and that was it.
It just closed a week ago and already zillow shows the sale but says their estimate is 36k less than the sold for price so I have no idea how opendoor makes money unless they are going to only rent, not resell.
Just be prepared to move out very quickly. We had to pack, find movers for an out of state move, get storage units, transport 2 car's, 2 motorcycles, sell another car and I had to find a short term lease that took multiple pets (lucky as hell to find one in less then 30 days tho I'm paying a ridiculous rent) until I can get back in a house that has renters in it here.
I'm still in shock that we actually managed to do it all.
There might be money to be made in the missing realtor commissions. Recorded selling prices do not adjust for the amount of commission paid. Zillow pocketing fees on both ends (purchase and sale) that usually go to third party brokers might be enough to squeak a profit out even thought the recorded prices might not look like it. Thinking out loud. Honestly don't know.
They don't have listing agents in all their markets, so they out$ourselves listings, and also pay cobrokerage fees.
I think that's a cost to consider.
Tom and Joe grew watermelons.
They picked a truckload and took them to the market.
They watermelons cost them $3.00 each to grow.
They sold them all for $2.50.
Tom says, "Joe, we lost $0.50 per melon. What should we do?"
Joe says, "We'll buy a bigger truck!!!"
That is the MadMan Muntz principal.
"I lose money on every deal, but I make it up in volume".
It's the Amazon model.
Self-consuming ruinous pricing as long as the capital holds out, and if you can get enough market share, you can set the new pricing. Run the B&Ns and Borders and Books-A-Million and others out of business, and control pricing.
Long view. Of course, Amazon was subsidized in the endeavor by government, funding AWS, which generated enough profit to float the retail operation.
Amazon was doing it long before AWS was created. Jeff Bezos told everyone what he was going to do and why he started with books way back when. Then he followed through and got big enough that he started building his own data network and leased excess capacity to others. Then built capacity just to lease to others.
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It's the Walgreens, CVS, Rite-Aid model. Buy up all the street corners, and the deepest pockets push the other(s) out of business, and control pricing.
Except when someone like Amazon comes in and decides to enter your market and suddenly how many corners you have doesn't matter. Everyone expects them to be delivered to the door
Amazon was doing it long before AWS was created. Jeff Bezos told everyone what he was going to do and why he started with books way back when. Then he followed through and got big enough that he started building his own data network and leased excess capacity to others. Then built capacity just to lease to others.
Except when someone like Amazon comes in and decides to enter your market and suddenly how many corners you have doesn't matter. Everyone expects them to be delivered to the door
And, that forerunner of AWS developed into providing 75%--80% of Bezos' profits, to help support slim, nearly ruinous, margins in retail.
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