What are we all going to do?

Question

Hey all,

I’m reaching out to get an opinion on this whole online buying craze in the housing market. So it’s been talk for a little while the Zillow and a few other companies are going to start buying your house almost instantly over the internet. I’ve been seeing a lot of “conspiracy” stuff and hearing people talk about it, well it’s getting kind of scary. So my question is who else thinks this is going to change the way we do investing now? Will we be out of business, especially one trick ponies like new wholesalers? Do you think his will help or hurt us, and why? All answers appreciated!

Brooks Rembert · Answer

Hi @John Moore, I have a story which happened just recently...

I was on the prowl for a new buy and hold and ran across a promising looking place on Zillow. (I know, I know)

It was a BRRRR-looking dream, so I used the form on the house's Zillow page to ask a simple question...

"There appears to be some water damage. Do you know if there is any mold in the house?"

HO---LY--- HELL---

That sent off a firestorm of phone calls and texts from multiple robo-dialers, because unbeknownst to me, it was in fact a Zillow owned house.

I finally took one of the calls and the used-car salesman sounding guy asked if I minded being put on hold so he could transfer me to an agent.

4 minutes past and slick Willy was back.

"Bob's not picking up. Lemme put you on hold again and find another agent".

"No thanks". Click.

The moral of this yarn?

Yes, they're making a push into buying and selling houses online.

But if the "experience" doesn't improve DRAMATICALLY, home-buyers will be turned off and word will spread.

So just keep doing what you do... use your personal touch and don't run your business like a puppy mill --- all will be fine.

My 2 cents.

Mike Dymski · Answer

Real estate sales is a high stakes, highly emotional, belly-to-belly business. Technology can disrupt it but not replace it, particularly for the skilled agents/brokers.

Kenny Dahill · Answer

I've been curious about these programs myself: Zillow, Opendoor, etc.  There are a few OpenDoors in my neighborhood that bought homes that needed a complete remodel.  I ran the comps on a few out of curiosity, they bought them at what a flipper would need to buy it at.

This could be great business until the market turns and they're stuck holding onto the assets.  Although that could be the time to low ball offers because they're less likely to be emotional about the sale.  I'm sure their algorithms have a pinpoint dollar amount for their lowest acceptable offer.  We just need to figure it out.

Cody Ruff · Answer

@John Moore I think it will be a small portion of buyers that will buy online. I still think with a house is such an emotional and big purchase people want to be able to see it and touch it. Also real estate agents seem to always the negotiate the best contracts and get the best price that online brokerages can’t always provide or a compute algorithm can’t negotiate

Steve Vaughan · Answer

Interesting.   I always check real quick who owns the asset I'm considering purchasing but didn't realize Zillow, etc could actually be the owner if you're in one of their 15 or however many metro markets.

The OP is in KY.  I'm 2 hours away from a metro area.  'Rural' markets will always be transacted the old school way and need a personal touch and personal expertise.

I have an alternate name, ph# (an old landline #) and e-mail address for potential salesy stuff.  When an e-mail comes over as 'Dear Schmafee, Schmafee did you know, Schmafee your account is at risk, etc I know its a solicitation/bs.  Hopefully you won't be robo called / texted forever.  Don't use your real ph# with data/lead- generation sites if you don't have to.

Jonathon Weber · Answer

Relationships will always trump technology. House purchases online will continue to grow and hedge funds and people with a lot of cash will continue to increase their frequency in buying homes to capture equity, especially after a downward period of prices, but there will always be the relationship with folks that can get you deals.

John Moore · Answer

@Brooks Rembert thank you, I appreciate your advice. I know someone will always want that personal touch, I’ll just have to try to make sure I’m a top performer in my area to have peace of mind. I can’t believe the service is really that poor 😅

What are we all going to do?

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