Stop Buying Homes

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The Housing Market By Zillow And Redfin:

@seangotcher

#housing

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Websites like Zillow, RedFin, and OpenDoor have recently launched an “iBuyer” program that allows homeowners to get instant cash offers if they want to sell their home. But in this case, since Zillow and other websites have detailed information on where buyers are searching, where price trends are increasing, and how much every property sells for…they could, theoretically, target the most up-and-coming neighborhoods…buy up the inventory at discount…and then, when they own enough, they effectively “control” the market and set their own prices at a profit.

Redfin responded by saying this was not true, they would rather broker the deal than own it…they never intentionally under or overpay for a home…and only 5% of homeowners prefer convenience to a traditional listing.

But, as far as the TRUTH behind these claims…here are the facts:

First, the TikTok videos claim that iBuyers are lowballing homeowners for convenience…but, the real data says otherwise: Zillow claims that the homeowners who turn DOWN their iBuyer offer receive an average of only 0.09% MORE on their home sale by going the traditional route…and, more recently… it was found that iBuyers actually pay an average of 4% MORE than the homes market value…while dropping their fees alongside with it…meaning, in a way…they’re actually paying more than the home is worth just for the sake of getting to buy it….so, right there…his first argument is completely false.

Second, he mentions that, IF a company like this was able to buy up all the homes in the area…they could pay $30,000 more for that last home and THAT would lift up the value of every other house alongside with it…except…that is NOT how the real estate market operates.

The average homeowner stays 8 years before moving. For a company like Zillow to accumulate enough real estate to create a monopoly, this would be a decades-long phase of accumulating and holding houses…without any guarantee of actually buying enough to make a difference on the market. But, even if they WERE able to buy up all the homes…they would also need to buy all the homes at a discount, which – as we can see…isn’t happening…and, they’d still need to raise the market value of that last home…which, is impossible.

Instead, these programs only seem to be interested in buying homes for two reasons: one is growing marketshare, and two is gathering data. Since they do generate a SIGNIFICANT amount of their revenue from advertising…they can SELL active seller information to third parties for as much as $1875 each….meaning, even if Zillow or Redfin doesn’t make profit iBuying homes…they’re gaining marketshare, they’re gathering a more targeted set of data …and, long term…they’ll probably make a lot of money….but, not by raising the cost of houses in your area.

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