They paid $410,000 and are listing for $425,000? Are they expecting a bidding war? By the way, OpenDoor has 300 listings in Phoenix already!
Hat tip to daytrip for sending this in – an excerpt:
Noel Levine, a freelance IT consultant and self-described geek, said he looked into other online services like OfferPad and OpenDoor, which the new Zillow program competes against. He was thinking about listing the house with a broker when he saw an article about the Zillow Instant Offers expansion in the local newspaper. Zillow was able to accommodate the quick turnaround. The deal started with a request for an offer on May 3 and closed 15 days later, at a purchase price of $410,000.
“So in two weeks I went from having a house to put on the market to being out of the house with money in the bank,” Levine wrote in a thank you note to Zillow that he shared with GeekWire. “It spared me from having to go thru the trials and tribulations of wondering how many showings it was getting, then wondering if I should accept an offer, to dealing with the inspection deductions to worrying about what could go wrong with the closing.”
The home is now listed on Zillow with a priced at $425,000 (the Zestimate is $414,233). It boasts “real wood flooring, travertine tile, and stacked stone accents,” according to the listing. The company bets that buyers will love the “cozy gas fireplace” and “master retreat.”
Link to Full Article
This has to be the most strategic move of all-time.
Get the story out that you are paying within $15,000 of retail, and everybody will sell to you. Ingenious.
“Noel Levine, a freelance IT consultant…”
Hmmm. Interesting occupation for the seller of Zillow’s first house buy. Glad it went so well with a random stranger. Some might call it “lucky.”
We need a real estate word like “astroturf” for fake grassroots efforts. Homefronting?
LOL – Homefronting, that’s a good one.
Here is an agent who shopped the ibuyers (let me know if it is behind the firewall):
https://www.inman.com/2018/05/24/an-atlanta-agent-takes-knock-offerpad-and-opendoor-for-a-test-drive/
Let’s ignore that he is trying to get them to properly evaluate his custom home that wasn’t updated on the tax rolls.
The important part is the method used by the ibuyers – it is the same as the pro flippers. Cherry-pick the lowest comps you can find, and hope your ease of sale and quick money is enough to entice the homeseller.
All were offering to purchase for substantially below estimated value – which I’ll say was probably $450,000 since his appraisal was $495,000 – and then they hit you with extra fees and repair costs too.
This first Zillow deal will be an outlier. They hired the whole staff of a corporate flipping operation to handle these sales, not a bunch of hacks. They will be buying for at least 20% under value once they get going.
Yeah, the Inman article is behind a Paywall. It’s interesting that Zillow decided to start in Phoenix and then going to Las Vegas next. I wonder why?e
In summary:
His $450,000 house got offers from Knock, and OfferPad. He worked with them to get their highest bid, and ended up with $373,000 and $295,000 respectively.
OpenDoor only buys newer houses, so the agent used a friends’ house, and the OpenDoor bid was about 10% under the net you would receive after selling with a traditional realtor.
These companies are in this to make money – gobs of it.
LOL at trying to sell for 10k over their own Zestimate.
Zillow putting a little zest in their zestimates.