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How Zillow's homebuying scheme lost $881M

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Re: How Zillow's homebuying scheme lost $881M

#371

Post by gnicholas »

ensignavenger wrote: post #175
MiroF wrote: post #136

Earlier quoted context omitted.

You're not a liberal if you're casually violating fair housing law :) Everyone wants to call themselves a liberal or progressive nowadays, it's bizarre. These things are about actions, not self-assigned labels.

Is visa status a protected class for rentals in CA/Berkley?

Looks like immigration status is protected. I wonder if a plaintiff could win a case on the grounds that they were discriminated against because they weren't on a temporary visa.

As a former lawyer, I realize it's possible to make the argument, but it's probably clear from the legislative history of the law that it's meant to protect people who are on visas, not people who aren't.

Also, she would probably say that her rule is that she only rents to people who have an extremely compelling reason to leave after 1-2 years. Compelling reasons include time-limited positions (postdocs) or visa restrictions.

Re: How Zillow's homebuying scheme lost $881M

#372

Post by Dylan16807 »

jjav wrote: post #368
lubesGordi wrote: post #157

Earlier quoted context omitted.

I'm under the impression that 'cash offer' just means that whoever is buying has already secured their financing. That means there's almost no risk of the deal falling through and the sale can go from contingent to pending immediately. This is better for the buyer because they sell faster. Senior software eng at microsoft can pull this off no problem (no one is buying a house with cash in their bank, not even rich pe…

No, cash offer means actually pay it cash. If there's any kind of financing involved, the bank will need to approve the purchase, slowing down the process, which is what a cash offer bypasses. > no one is buying a house with cash in their bank, not even rich people They most certainly are. Tons of real estate sales here (Silicon Valley) are all-cash because the other people making offers are also all-cash, so the onl…

> If there's any kind of financing involved, the bank will need to approve the purchase, slowing down the process, which is what a cash offer bypasses.

That's not "already secured" then, is it?

Re: How Zillow's homebuying scheme lost $881M

#373

Post by dionidium »

jjav wrote: post #327
anchpop wrote: post #281

Earlier quoted context omitted.

In areas where home prices are high, the vast majority of homes have people living in them. So the idea that home prices are inflated by people buying homes and not doing anything with them seems a bit suspect to me. Additionally it kind of strains belief that people are buying homes, paying property tax, etc. just because they like collecting them the way a kid likes collecting pokemon cards. More likely they'd buy…

> In areas where home prices are high, the vast majority of homes have people living in them. When the very rich park wealth in real estate, it is precisely in the ares where prices are highest. Not much point in parking wealth in a cheap house in the midwest. https://nypost.com/2021/08/05/nearly-half-of-luxury-units-em...

The problem here is that there are something like 3.5 million housing units in New York City and Billionaires' Row is like 5 buildings. It just simply doesn't matter if every single one of those units is empty. We're not talking about enough units to matter.

Re: How Zillow's homebuying scheme lost $881M

#374

Post by thatfrenchguy »

tshaddox wrote: post #188
paxys wrote: post #40

Earlier quoted context omitted.

One can blame Airbnb, Zillow or whoever else, but the truth is that speculation in real estate and vacation towns have both been a thing for a very long time. If the population rises and we refuse to build more houses, the existing ones will get more expensive no matter what. The solution is out there in front of us but everyone prefers to dance around it.

> If the population rises and we refuse to build more houses Building more houses is generally good too, but it's a bit of a cop-out to blame the whole situation on that. Totally independent of supply concerns, I would argue that it's not great that in so many areas the value of homes seems to be almost entirely divorced from the fact that people need homes to live in . Imagine if a bunch of very wealthy people just…

I mean, the US missed on building ~15m housing units in the last decade, we can bitch about airbnb all day, that doesn't make 15m housing unit appear.

Re: How Zillow's homebuying scheme lost $881M

#375

Post by karpierz »

dyu wrote: post #278
karpierz wrote: post #179

Earlier quoted context omitted.

It means that they aren't using a mortgage to buy it. If there's a mortgage involved, then the offer becomes contingent on the bank's due diligence which can cause the deal to fall through in a variety of ways. For example: the bank will only loan you money up to the appraised value of the home, which is done after the deal is signed (banks won't send an appraiser to every house you make an offer on). If the appraise…

While it is true cash offers in the strict sense mean real cash, it may also mean no-contingency offers. You can go through mortgage underwriting first and commit to pay the gap between appraised value and deal value, and can make a no-contingency offer with minimum risk. Or, if you are willing to lose your deposit (usually 3-5%) you can also make a no-contingency offer to be more attractive.

> You can go through mortgage underwriting first and commit to pay the gap between appraised value and deal value, and can make a no-contingency offer with minimum risk.

Of course, but unless the amount you commit to bridge is unbounded, you're still contingent in appraisal price. And if you did commit to that, you're just making a cash offer with extra steps.

Deposits in my experience are token (around 2%). And usually sellers will verify that you have the cash on hand for no-contingency offers, since 2% is not worth waiting and then redoing the house selling process.

Re: How Zillow's homebuying scheme lost $881M

#376

Post by afterburner »

lotsofpulp wrote: post #285
afterburner wrote: post #272

Earlier quoted context omitted.

People tell outrageous lies on Facebook all the time and they seem to work. Deception works (especially subtle deception), and laziness is a thing. Also, Zillow's current value estimates are about "current" values, not past values.

Zillow’s current value estimates are their opinion (or what they want people to think is their opinion). Regardless, it is no different than a real estate agent or a cashier at target saying they think a specific property is worth $x. At the end of the day, a buyer and seller coming together and agreeing on a price is the only thing that matters. A seller pays as much as they do because they do not have a better opti…

Perception matters. Direction and rate of value increases in a neighbourhood matters. The perception of the neighbourhood affects the value of a particular property.

Zillow can affect that perception. It is making calls about entire neighbourhoods, not just one property that it has a declared interest in. It is acting as a supposed uninterested party (valuing the market overall) and an interested party (benefiting from the valuing of a particular property). That's the potential conflict of interest.

How much home buying do real estate agents engage in vs just acting as an agent, compared to Zillow (in relative terms)? I don't know, maybe it's similar...

Re: How Zillow's homebuying scheme lost $881M

#377

Post by mdavis6890 »

thr0wawayf00 wrote: post #9

The scary thing is that it's easy to see how something how like this could drive a market boom and bust cycle. I'm imagining a scenario where two iBuyer companies try to outbid each other algorithmically, driving the prices further and further out of reach of people who are looking for a primary home. Tangentially related, I talked to a friend who works on geospatial data for one of the big vacation rental companies,…

“ The scary thing is that it's easy to see how something how like this could drive a market boom and bust cycle.”

The opposite really. Speculators do their best to buy low which pushes the price back up toward the mean in the aggregate, and sell high, which pushes it back down toward the mean.

Speculation is a stabilizing force overall.

The boom and bust cycle in real estate is very real, but driven by other things.

Re: How Zillow's homebuying scheme lost $881M

#378

Post by seanmcdirmid »

giraffe_lady wrote: post #252
jsnk wrote: post #224

Earlier quoted context omitted.

This analogy is quite lacking. You should also mention that this medicine rich people are collecting also has dozens of other alternative medicines with hundreds of thousands in volume because other cities exist. Also you should mention that some of these rich people are not rich people at all, but working class people who's lived in a location for decades which has become a desirable location in recent years thanks…

Cites are not fungible, I hate that this always comes up. I have relationships here going back to my childhood, I sometimes visit the grave of the person I am named for, I spend every sunday afternoon cooking and eating with the 97-year-old who took me in and nursed me back to health decades ago. If I move to another city these things aren't coming with. Now you can dismiss these things as inherently less meaningful…

They aren’t fungible to you, but to other people moving into your city from somewhere else because of economic opportunities they are (or they wouldn’t have moved so easily).

Re: How Zillow's homebuying scheme lost $881M

#379

Post by jacobr1 »

c-linkage wrote: post #269
paxys wrote: post #40

Earlier quoted context omitted.

One can blame Airbnb, Zillow or whoever else, but the truth is that speculation in real estate and vacation towns have both been a thing for a very long time. If the population rises and we refuse to build more houses, the existing ones will get more expensive no matter what. The solution is out there in front of us but everyone prefers to dance around it.

Change the word "house" to "car" and I think the problem becomes not-so obvious. It's often bemoaned that personal cars are a waste of money and space: they sit idle most of the time, we have to build parking lots to accommodate them and that takes space. It would be so much better if we could just hire cars on demand! But this doesn't scale because the demand is not spread out during the day -- absent carpooling, yo…

We take two types of vacations: 1) foreign travel where we are constantly on the go visiting new places and 2) home rentals with extended family.

For the second category usually it is the beach, but sometimes in the mountains or other area. We tend to get 10-15 members of our extended family and friends and the activities often include making food communally, playing games, moving between the house and walking distance activity like the shore, even napping. The house very much gets used and isn't just a place to sleep.

Re: How Zillow's homebuying scheme lost $881M

#380

Post by seanmcdirmid »

anchpop wrote: post #287
wwweston wrote: post #137

Earlier quoted context omitted.

> they can't do much if you stop paying rent. I'm aware of specific stories where bad-faith tenants have made enforcement difficult , but I'm also aware of enough specific stories from the other side where tenants -- even some who have committed no violations -- have found themselves without housing to know that as a total generalization, these statements are false. And you don't get to a resident-sourced homelessnes…

> I'm aware of specific stories where bad-faith tenants have made enforcement difficult, but I'm also aware of enough specific stories from the other side where tenants -- even some who have committed no violations -- have found themselves without housing to know that as a total generalization, these statements are false. I'm aware of hundreds of stories about homicidal cardiologists, but I wouldn't try to make a jud…

Once you are exposed to one homicidal cardiologist, it’s no longer an anecdote. Landlords who aren’t very thorough in background and credit checks are very very likely to have a bad experience (and they won’t repeat the same mistake twice).

Being a landlord is a hard way at making money.

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