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It’s my impression that many sellers to these companies do it so they have up front funds to use as down payments for their new property. In order to be competitive elsewhere they may need to show funds equal to 20 or 30% down.
Their home sales generated almost double the revenue they received from agent advertising. With agent advertising fairly mature at this point, home flips are a logical shift where the sky's the limit with volume. Also, plenty of opportunity to massage the numbers to make hitting quarterly targets more predictable. They are just warming up right now with only a few thousand homes in inventory. I-buyers aren't going away anytime soon.
I'm not going to quote the last 4 replies but I will say that even with the fees, we still got a higher sale price profit than we would have when compared to the last "traditional" sale of a comparable model on my street that happened 3 months before. And no, it was not even close to 12% in fees like one poster assumed. Maybe if the house needs a lot of work it could be higher, idk. This house would be considered "move in ready" for a traditional sale. My guess is opendoor is going to rule the rental market. They asked us to include all of the appliances in the sale so we did.
We did not need the cash upfront for another down payment nor was the house in disrepair. It was a brick build on a large, landscaped lot, with a large driveway and 3 car garage in a well kept neighborhood .
I am only an expert on the sale of this house but I think I would know more about the process than someone who hasn't sold a house to opendoor, because we actually did it.
I can say the process was painless compared to the older traditional type sales. If possible I will never sell to an individual who uses a realtor, having a lock box on the door, people in and out, no privacy, who needs appraisals, inspections, mortgage approval, closing cost, wants to negotiate and knit pick every little detail, etc. Another big plus is not having to remove our pets or worrying about them getting loose for showings or open house.
But, I would absolutely want to use one if I ever want to buy traditionally again.
I'm not going to quote the last 4 replies but I will say that even with the fees, we still got a higher sale price profit than we would have when compared to the last "traditional" sale of a comparable model on my street that happened 3 months before. And no, it was not even close to 12% in fees like one poster assumed. Maybe if the house needs a lot of work it could be higher, idk. This house would be considered "move in ready" for a traditional sale. My guess is opendoor is going to rule the rental market. They asked us to include all of the appliances in the sale so we did.
We did not need the cash upfront for another down payment nor was the house in disrepair. It was a brick build on a large, landscaped lot, with a large driveway and 3 car garage in a well kept neighborhood .
I am only an expert on the sale of this house but I think I would know more about the process than someone who hasn't sold a house to opendoor, because we actually did it.
I can say the process was painless compared to the older traditional type sales. If possible I will never sell to an individual who uses a realtor, having a lock box on the door, people in and out, no privacy, who needs appraisals, inspections, mortgage approval, closing cost, wants to negotiate and knit pick every little detail, etc. Another big plus is not having to remove our pets or worrying about them getting loose for showings or open house.
But, I would absolutely want to use one if I ever want to buy traditionally again.
Eh... FWIW, I will never again live in a house I am selling.
It astounds me when people who can afford to vacate stay in the house and decide to take on all the hassles of occupied-selling.
Yes. Not everyone can move out, for various reasons, but more people can do so than actually thought.
If the iBuyer flippers prove to be unsustainable, who will people sell to?
Reasonable question, because they are only currently sustained by rampant incineration of investor cash.
I'm not going to quote the last 4 replies but I will say that even with the fees, we still got a higher sale price profit than we would have when compared to the last "traditional" sale of a comparable model on my street that happened 3 months before. And no, it was not even close to 12% in fees like one poster assumed. ...
But, I would absolutely want to use one if I ever want to buy traditionally again.
Yes, some sales are hard and some agents, buyers, or sellers (or lenders or appraisers) have an amazing ability to muck up the process. The act of an open bidding process does create inconvenience and loss of privacy. However, I still believe that this is a process if done correctly will usually net the most money.
That being said, would you share the percent of your net vs your sales price? If you got 100k, and you had $7000 in expenses, your net would have been 93%.
Eh... FWIW, I will never again live in a house I am selling.
It astounds me when people who can afford to vacate stay in the house and decide to take on all the hassles of occupied-selling.
Yes. Not everyone can move out, for various reasons, but more people can do so than actually thought.
If the iBuyer flippers prove to be unsustainable, who will people sell to?
Reasonable question, because they are only currently sustained by rampant incineration of investor cash.
It's worth a lot because I won't either unless I sell in this same manner. Also, "iBuyer flippers" is an oxymoron when talking about my opendoor experience. Whenever I hear or read that it makes me think someone is mad about the ibuyer option. A flipper usual lowballs then does minimal repairs to sell for a large profit.
My guess is that if/when ibuyers are no longer around I would think selling would return to the traditional ways.
Quote:
Originally Posted by Brandon Hoffman
Yes, some sales are hard and some agents, buyers, or sellers (or lenders or appraisers) have an amazing ability to muck up the process. The act of an open bidding process does create inconvenience and loss of privacy. However, I still believe that this is a process if done correctly will usually net the most money.
That being said, would you share the percent of your net vs your sales price? If you got 100k, and you had $7000 in expenses, your net would have been 93%.
I don't mind. It was slightly less that 6.5%. If my math is right (no guarantees) net was 93.525%.
It's worth a lot because I won't either unless I sell in this same manner. Also, "iBuyer flippers" is an oxymoron when talking about my opendoor experience. Whenever I hear or read that it makes me think someone is mad about the ibuyer option. A flipper usual lowballs then does minimal repairs to sell for a large profit.
My guess is that if/when ibuyers are no longer around I would think selling would return to the traditional ways.
I don't mind. It was slightly less that 6.5%. If my math is right (no guarantees) net was 93.525%.
Offerpad, OpenDoor, Zillow and similar absolutely are flippers, pure and simple, no matter how much they disclaim otherwise.
A flipper buys a property with full intent to sell it fairly quickly to make a profit. Some do that via lowballs. Some have a glitz without substance that takes advantage of impressionable and desperate buyers in a market that is totally out of whack.
And, flipping is what they are doing. The disclaimers are truly false, so I mention it because some folks just give iBuyer flippers too much credit.
Every other explanation is bogus.
I'm much more intrigued by the iBuyer flipper model, due to the extremely poor quality of too much of their inventory, and their incredible cash burn.
Like any successful, long-time profitable businessperson can tell you, if you sell at a loss, you won't make it up in volume.
I certainly am not mad about any of it. I find the whole thing intriguing. Yes, I do believe there are some ethical issues. You might feel that way if you saw as many of these flips as I have. The traditional flipper puts more lipstick on their pigs than the iBuyer flippers do.
Traditional flippers can afford to, because they tend to be profitable, or they quit.
Last edited by MikeJaquish; 08-17-2021 at 11:22 AM..
Offerpad, OpenDoor, Zillow and similar absolutely are flippers, pure and simple, no matter how much they disclaim otherwise.
A flipper buys a property with full intent to sell it fairly quickly to make a profit. Some do that via lowballs. Some have a glitz without substance that takes advantage of impressionable and desperate buyers in a market that is totally out of whack.
And, flipping is what they are doing. The disclaimers are truly false, so I mention it because some folks just giveiBuyer flippers too much credit.
Every other explanation is bogus.
I'm much more intrigued by the iBuyer flipper model, due to the extremely poor quality of too much of their inventory, and their incredible cash burn.
Like any successful, long-time profitable businessperson can tell you, if you sell at a loss, you won't make it up in volume.
I certainly am not mad about any of it.
I didn't say you personally were mad about it, but I wouldn't blame you if you were, because opendoor is buying up houses like crazy in your area. And there certainly are people who are mad about it because it takes away from realtors who otherwise would have made that sale.
Maybe there are ibuyer flippers who only buy trash houses, but like I said, that is an oxymoron when referring to my experience with opendoor. I have no opinion about the other companies you mentioned because I have never dealt with them as a seller.
I really wish other people who have sold to opendoor would post how it went for them.
I didn't say you personally were mad about it, but I wouldn't blame you if you were, because opendoor is buying up houses like crazy in your area. And there certainly are people who are mad about it because it takes away from realtors who otherwise would have made that sale.
Maybe there are ibuyer flippers who only buy trash houses, but like I said, that is an oxymoron when referring to my experience with opendoor. I have no opinion about the other companies you mentioned because I have never dealt with them as a seller.
I really wish other people who have sold to opendoor would post how it went for them.
These flippers really cost me nothing but time. I may have to show buyers a couple of squalid iFlips before they realize what is going on.
Your experience is a much smaller sample size than mine.
But, a real estate agent who cannot make it due to OpenDoor, Zillow, or Offerpad, etc, needs to rethink their mission in life.
If they can't find clients who need good service because of iFlipper volume, they otherwise would find some other excuse for failure if iFlippers didn't exist.
"IFlippers" and "iFlips." Not as pointed, but less redundancy?
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