This article mentions Opendoor more than Zillow. Misleading title
Zillow, Other Tech Firms Are in an ‘Arms Race’ to Buy Up American Homes
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Re: Zillow, Other Tech Firms Are in an ‘Arms Race’ to Buy Up American Homes
#12I have come to see house flipping as a horrendous scam that kills the economy and is all but sustainable. And real estate agent are complicit and making the problem worse because it’s making them money
One of my accountances is a professional house flipper. They claim to regularly make over 100k of profit on a single house in less that 3 months. Keep in mind they contract out all the manual labour.
The 1st step is obviously to find a house, preferably before it hits the market. Then, contact the seller’s agent and promise them that if they sell you the house for a good price you’ll go through them when you sell the house after having flipped it. At this point, the agent’s incentive is disconnected from the seller’s: If they can convince to sell off market, they’ll sell quicker, make the commission on a lower price but expects to make a much higher commission on the 2nd sale than what the 1st one would have fetched. The seller gets fucked.
Then, the flipper finds the cheapest contractor with immediate availability. cheap+available is usually a bad sign in term of quality. They have them do the minimal work to make the house “look good”. No deep electricity, certainly no plumbing, rooftop or foundations.
After a couple of months. Put on the market. At this point, you want to put it on the market at (original price paid+original agent’s fees+second sale agent’s fees+remodel cost+your sizeable margin) that ends up easily increasing the original pricd by 30%, sometimes more.
The buyer gets fucked too because they pay extra for shitty work. They’ll have to do more work on the house, both short term and long term.
But the ones who get really fucked are the other potential buyers : it’s super hard to find a house that wasn’t flipped, prices go up because everyone wants whatever the neighbors house got sold for, there’s even less contractors available
I’m convince flippers have a negative impact on society at large.
Re: Zillow, Other Tech Firms Are in an ‘Arms Race’ to Buy Up American Homes
#13> World Economic Forum: Welcome to 2030. I own nothing, have no privacy, and life has never been better https://twitter.com/wef/status/849459333486317568
Poor Ida Auken. All she does is write a mildly provocative title, and look what happens. Peter Bilmer's response in that thread is visually very clever, even if his politics are probably terrible. I'd like to know what the image at top right is. Some kind of startup accelerator?
I think it might be one of those WeLive "communes".
Re: Zillow, Other Tech Firms Are in an ‘Arms Race’ to Buy Up American Homes
#14I have come to see house flipping as a horrendous scam that kills the economy and is all but sustainable. And real estate agent are complicit and making the problem worse because it’s making them money One of my accountances is a professional house flipper. They claim to regularly make over 100k of profit on a single house in less that 3 months. Keep in mind they contract out all the manual labour. The 1st step is ob…
Middle men generally have negative impacts on society overall once they become entrenched. Their role becomes less service provider/facilitator and more parasitic.
What’s preventing homeowners from buying and selling to each other directly? Why do we need real estate agents? (I ask as a mid 20s engineer who is probably never going to own a home)
Re: Zillow, Other Tech Firms Are in an ‘Arms Race’ to Buy Up American Homes
#15Earlier quoted context omitted.
Is this a relevant critique? You arent renting from these marketplaces (at least not today) - they’re just facilitating transactions
> “It’s less about making money off that inventory, at least initially, and more about who can get the most inventory the fastest.” > iBuyers have recently shifted “to a free-for-all, acquire at any cost strategy.” At present, both Opendoor and Zillow’s homes division are losing money in the process. > “For some families, it may be difficult to compete, when they are trying to buy a house, with a company like that,”…
I understand all of that, but an investment company owning a property does not mean that individual homeowners can't own them. There's a leap in logic here where its assumed any company owning residential real estate = everyone is forever a rentier. That's a separate claim worth backing with some evidence (e.g. investment companies buying properties -> increased home prices across geographies -> no one can afford a home), which I haven't seen and the article doesn't provide
Re: Zillow, Other Tech Firms Are in an ‘Arms Race’ to Buy Up American Homes
#16I have come to see house flipping as a horrendous scam that kills the economy and is all but sustainable. And real estate agent are complicit and making the problem worse because it’s making them money One of my accountances is a professional house flipper. They claim to regularly make over 100k of profit on a single house in less that 3 months. Keep in mind they contract out all the manual labour. The 1st step is ob…
Middle men generally have negative impacts on society overall once they become entrenched. Their role becomes less service provider/facilitator and more parasitic. What’s preventing homeowners from buying and selling to each other directly? Why do we need real estate agents? (I ask as a mid 20s engineer who is probably never going to own a home)
>What’s preventing homeowners from buying and selling to each other directly? Why do we need real estate agents?
Because a slight miscalculation in value, lack of market insights or poor salesmanship can lead to tens of thousands of dollars left on the table by the seller.
Re: Zillow, Other Tech Firms Are in an ‘Arms Race’ to Buy Up American Homes
#17I have come to see house flipping as a horrendous scam that kills the economy and is all but sustainable. And real estate agent are complicit and making the problem worse because it’s making them money One of my accountances is a professional house flipper. They claim to regularly make over 100k of profit on a single house in less that 3 months. Keep in mind they contract out all the manual labour. The 1st step is ob…
What you've described sounds like regular old consumerism.
The type of person that buys the flipped property isn't looking for a long term investment or hassle-free life.
What they want is the feeling of getting something shiny and new without spending a fortune on a properly improved building, even if it means tens of thousands of dollars in maintenance cost down the road.
This is something I've learned in the past year or so through e-commerce, and then mapping the behaviours of my customers onto family and friends that I know. A significant portion of the population enjoy spending money on shiny shit, and buying and getting something new is the end goal in and of itself.
The classical understanding that people will spend money to solve a problem after weighing the benefits against the cost only really applies to the population at large when finances are limited.
Re: Zillow, Other Tech Firms Are in an ‘Arms Race’ to Buy Up American Homes
#18I have come to see house flipping as a horrendous scam that kills the economy and is all but sustainable. And real estate agent are complicit and making the problem worse because it’s making them money One of my accountances is a professional house flipper. They claim to regularly make over 100k of profit on a single house in less that 3 months. Keep in mind they contract out all the manual labour. The 1st step is ob…
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Re: Zillow, Other Tech Firms Are in an ‘Arms Race’ to Buy Up American Homes
#19I have come to see house flipping as a horrendous scam that kills the economy and is all but sustainable. And real estate agent are complicit and making the problem worse because it’s making them money One of my accountances is a professional house flipper. They claim to regularly make over 100k of profit on a single house in less that 3 months. Keep in mind they contract out all the manual labour. The 1st step is ob…
I'm in the market for a house right now and red flags for myself and my agent are houses that were purchased within the prior 2 years to be resold. We just don't touch them. If the market educates itself we can starve the flippers of revenue (not that I'm naive enough to think that will happen)
Re: Zillow, Other Tech Firms Are in an ‘Arms Race’ to Buy Up American Homes
#20Earlier quoted context omitted.
Middle men generally have negative impacts on society overall once they become entrenched. Their role becomes less service provider/facilitator and more parasitic. What’s preventing homeowners from buying and selling to each other directly? Why do we need real estate agents? (I ask as a mid 20s engineer who is probably never going to own a home)
>What’s preventing homeowners from buying and selling to each other directly? Why do we need real estate agents? Because a slight miscalculation in value, lack of market insights or poor salesmanship can lead to tens of thousands of dollars left on the table by the seller.
Yeah, no. In countries like India you don't use agents to buy or sell property and the free market finds value just fine. That's just one example I'm familiar with and it was pre internet.