저자: Kevin · 외국인
요약 보기
Zillow 등 iBuyer 프로그램은 판매자에게 시세보다 낮게 매입해 손해를 준다고 주장. 실제 사례로 43만달러 제안 대비 전문 중개로 더 높은 가격에 매각 가능했다고 설명. 또한 iBuyer가 좋은 매물을 가져가 개인 투자자의 기회를 줄인다고 주장. Zillow 주가는 실적 호조로 11% 급등했다고 언급하나 개인적으로 선호하지 않는다고 밝힘. WSJ 기사는 iBuyer 마진이 낮다고 보도했지만 발언자는 동의하지 않음.
다듬은 글
Oh God, it's so cold. I can't believe I'm going to go outside. I have to talk about Zillow. Oh my God . Hello everyone! With you Kevin, I'm speaking to you from central Ohio. And the reason we're making this video today is because I have a confession to make. Well, maybe that's not exactly my confession.
This is an admission that Zillow should make. Oh, and a little side note: be sure to check ou Broadcasts at the link below. There is also a course for real estate agents with private broadcasts, an express course in San Francisco this Saturday, November 16, and a course on property management and personal finance.
Check the link below. I think companies like Zillow with their instant offer programs, Redfin, and companies like Open Door do two things, and they're two things that you should know about because they're going to help you make a lot of money. If you don't know, these companies make money by buying real estate and simplifying the buying process by offering a certain amount of cash for any property in any condition and they buy it within 7 days and the deal is done.
You are on the case. No realtors, no house showings, nothing like that. And I understand that, because if you don't know, I'm a real estate broker, but mostly I'm a real estate investor. I own over $6 million worth of real estate with no partners or investors other than my wife. However, after doing hundreds of deals for clients, I've realized that there's something special about homes like this, so subscribe and stay tuned for my upcoming video about this home.
This house was purchased for less than $10,000. And we will analyze the numbers and details about it. You can take a look and understand what you're dealing with here . But I want to focus on Zillow separately. Zillow recently released their earnings report, and the results were so good, beating expectations and breaking records, that their stock instantly rose more than 11%.
And remember, the purpose of this video is to tell you about the two problems that arise from this. Before we really get into this issue, let's look at it from a stock market perspective. Zillow may be an interesting option. Mostly, this could be an interesting option because they are going to turn Zillow Offers into an extremely profitable business.
Now, according to their latest financial report, Zillow Offers is not that profitable yet. This is not necessarily because the properties are sold at a loss. It seems that by looking at their financial report, one can conclude that they are spending a lot of time and money on infrastructure, advertising, and promoting this instant offer program.
So, I understand that. But Zillow wouldn't do this if they did n't have a long-term plan to make a ton of money from it. And we already know from the deals they make that there's a lot of money to be made from this . In fact, the Wall Street Journal has been investigating Zillow quite extensively lately.
There have been many articles about Zillow and similar quick home buying programs (iBuyer). If you don't know, iBuyer programs are when companies use algorithms and technology to make offers on real estate and then buy those properties. Cash, fast, ready. Almost like I described for this Zillow instant offer program .
So, we know they use algorithms. We know they use technology. We know they are going into these cheap houses. We know they are breaking records. They are outperforming stock market expectations. Things are going really, really well at Zillow right now, which explains why we have competition from Redfin, why we have competition from Open Door, and why it seems like there's a new iBuyer program coming out every week.
But what are the two big issues you should know about before I freeze? Because it may not look cold, but it feels like 14 degrees, and I'm not dressed for 14 degrees. Oh, I should have worn gloves. Wait, do I have gloves? Oh, there are gloves. Okay , problem number one, you've probably heard me say it before, but problem number two, if you watch the video to the end, could potentially change your life.
And I don't mean some worthless seminar where you have to go and spend 40 grand learning wholesale home resale and flipping with other people's money. No. No. This is not what we are talking about at all . The second part of this can make you a lot of money in the long run, especially if you take advantage of it.
But let's look at the first problem. The first problem with all these iBuyer programs is that companies come in and look at homes that, you know, hey, how are you doing? I am frozen. Yes, I believe. Okay, you know it's bad when an Ohio native looks at you after you say you're cold and says, "I believe so." So, the number one problem with the iBuyer program is this.
There is so much resentment, disgust, and distrust towards regular realtors and typical real estate sales that many sellers don't even want to talk to agents. This is a problem , and the easiest way to explain it is to give an example. I was inspecting a house that belonged to my client. They were willing to accept an offer from iBuyer for $430,000.
That means they would receive $430,000 for their property. They would pay certain commissions to Zillow, Open Door, or Redfin. I won't say specifically who it was. They would probably get about $420,000 in 7 days. I came to them and said, "Okay, I know you want to sell the property in its current condition." We can arrange it.
I know you don't want open displays, and I know time is important to you . I have a question. What if I could put this property on the market and we could make you an extra $50,000, only if you got your money in 30 days instead of 7 days? Would you consider trying this option? If that doesn't work, sell it to iBuyer.
No wonder she says that . Uh, yes, of course. I'll take an extra 50 thousand in three weeks, but how is that possible? Does n't it need home staging, repairs, a broken roof, and problems with the furnace? You know, the stove won't light. How can we even sell a house on the market with all these defects?
And finally I said, “Don’t worry about it.” I'll take care of it. I am a real estate broker. I provide more value, that's what I always tell my clients. I solve these problems. We put the property on the market for $479,000. And for 3 days, it's in Ventura, California. Within 3 days, we received seven offers.
And we ultimately chose the $55,000 offer. By the way, the buyer took out a loan. And when the appraiser said, "This is a problem" . "The stove is not working." Guess what I did? As a broker who, yes, gets paid money. I take a commission on this deal. Although the seller now nets almost $70,000 more than if she had sold it through the iBuyer program.
The appraiser says, "Well, the stove doesn't work. We can't give you a loan. " What should I do as a broker? I install a new stove, bill the escrow company, and get reimbursed. So, now all of a sudden, what happened? The iBuyer program lost, but in reality they simply lost a significant profit that would have been made by a regular seller who could have sold the property on the market in its current condition in the same stress-free way.
By the way, she didn't even have to wait 30 days if she did n't want to. She could have waited seven days and just accepted one of the cash offers we had for $460,000 or $470,000 and still gotten $30,000 more without home inspections and without all the headaches that usually accompany a real estate sale.
So now all of a sudden you're thinking, " Wow, wait a minute. These iBuyer programs are probably really, really undercutting sellers by significantly underselling their properties. Oh my god. That's great. It's like a spear." Now I know that such services exist, and people can make their own decisions whether they want to sell through these iBuyer programs, they have that choice, and there is no harm in it .
For example, you can't blame Zillow for saying, " Well, we made a clean offer of $420,000 and they decided to accept it. That's their problem if they left a bunch of money on the table." This is true. But what is the second problem with iBuyer programs? And this is the problem that, if you fully understand it, will help you make a lot of money.
Okay, let's drop this. Ready? The second problem with iBuyer programs is that they deprive you of the opportunity to make profitable deals ("wedge deals"). Look, that property that was sold for 550,000 is worth between 580 and 590 thousand dollars. This is a good investment deal if someone wanted to come in, buy it, turn it into a rental property, or live there for a year, then rent it out after doing some renovations.
So the second problem, and this is really the most important one, is that the more iBuyer programs there are , the harder it is for people like you and me to find the good deals that come out on the market . And it's actually a lose-lose situation, because remember, the first problem is that sellers are being ripped off by being given less value just out of a typical fear of the real estate industry, which could actually help them a lot more than they realize.
And the second problem is that it eliminates opportunities for regular rental property investors like us who don't want to significantly underpay. Look, we don't have to pay 420 for that house. We might pay 480 or 500 or whatever for it , but then we'll spend the same $20,000 that Zillow would spend.
And instead of Zillow making a huge $130,000 profit on the resale after paying for marketing and commissions, maybe they'll get less, but it is what it is. People like us could come and benefit from 50, 70, 100 thousand dollars, which I'll tell you about when I get in the car. Yes, I rented a Chrysler Pacifica.
The choice was between it and the Nissan Frontier; I wanted to take the Frontier, but the guy said the body would be covered in snow and the seats were cloth, so they would be quite uncomfortable. It's better to take this Chrysler with a leather interior. And then he looked at me and said, " After all, Kevin, you chose the cheapest car option, and you said we choose, so we decide what you get." So, you get veins.
Damn it. At least it's warm here. Oh, it's actually not bad . I really like it. There's also CarPlay here. So, to sum up, what the hell are we supposed to do? Well, in my opinion, we should work in our own areas. And if we want to find good real estate deals, we have to distribute flyers and information: "I'll pay you more than the I-buyer program." Whether you’re a real estate agent and you want to sell and we’ll get you more money than I-buyer programs, or you’re just a buyer and you’re like, “Hey, you’re writing a letter to someone: I’m a local real estate investor.
I would like to buy your house. If you are thinking about selling to these I-buyer programs, call me first. I will pay you more money. You will still get much more profit. You know, I think a lot of people in our society think, "Oh my god, why do I want to pay more money than the other guy?" The problem is not with other people at all.
We compete with buying companies that have huge, crazy costs that we don't have. This means that competing with i-buyer programs is an opportunity for us to pay a little more, still get great deals, and help sellers and our community stay with more money. Also, if you're not interested in real estate or bargains, well, you probably haven't watched the video up to this point, but you could just buy Zillow stock.
Although I'm not personally a fan of Zillow stock, because I was a Zillow Premier agent, and let me tell you—I'm not trying to criticize Zillow. This is just my opinion. That was just my experience. Customer service was terrible. Hello, short news for you. I am addressing you from this hotel room. So, an article just came out in the Wall Street Journal suggesting that i-buyer programs operate at relatively low margins.
So the article says that maybe these i-buyer programs aren't a scam. But I still disagree. That's why. The problem is that they used title insurance data. Title insurance companies are known for their very primitive property valuation algorithms. The article suggests that these companies are operating on much smaller margins than they should be.
It is possible. So, there are two important points to be aware of here. First, perhaps i-buyer programs will start paying good amounts for real estate to take advantage of the " Uber effect," where you enter the market, paying more than others, or charging less, like Uber compared to taxi drivers. Put taxi drivers out of business and now you can increase your profitability.
This is one of the options. But the second possibility is that people are still being scammed by selling to buyers. They sell much cheaper. And these general data do not reflect market conditions, which change every month. Oh, and even more realistically: just consider renting out the property instead of selling it.
Then you won't even have to worry about it. You just need to focus on how to make profitable deals by intercepting them from these buyers. Heat. Heat. N. Hey, hey, hey.
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