Where Real Estate Gets Its Dirt

Opendoor weirdness

Friday Flash: The year things got weird

“No, 2019 was the year consumers, also known as people, began to do very strange things in very significant numbers.
 
Two years ago, many in the industry thought the idea of a home seller paying 7-10% in fees for the privilege of getting a low-ball offer on their home was crazy, a pathway only for the desperate. 
  
Turns out lots of people were willing to do this in 2019. “

Brian Boero, 1000watt

Over the holiday break, I kept thinking about this insightful post (as usual) from Brian Boero of 1000watt. It pairs nicely with a webinar I did with Tyler Hixson, Opendoor’s Director of Real Estate Partnerships & Strategy.
You can watch the replay of the webinar in the video below. But one of the more “weird” things that came out of the discussion is that a vast majority of consumers were willing to pay the fee from Opendoor AND the agent’s full commission. They saw value in both. They appreciated the certainty and speed that Opendoor provided but also saw value in the guidance they received from their agent.

Think about that. In an age where many business models are trying to push commissions lower, or get rid of them entirely, many consumers are willing to pay more.

The fact that iBuyer offers have gone from “lowball” to fair market value might also be a factor. Here’s a quote from a recent article in the Wall Street Journal.

“The new study from Mike DelPrete, a scholar in residence on real-estate technology at the University of Colorado at Boulder, found Opendoor and Zillow typically purchase homes for just over 1%, or around $3,800, less than the value of the home as determined by First American Financial Corp. , a real estate title insurance company.”

These two shifts are more significant than people realize. iBuyers are not an either-or proposition, but something entirely different.

Things definitely got weird in 2019, hell I would include the entire decade. What weirdness this new decade will bring is what I’m excited about.

Back to work.

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