By Shelley Sakala
With promises of speed and simplicity, companies like Opendoor, Offerpad, and Zillow popped onto the scene, offering to buy your house in just a few days, no fix-up required. For some homeowners, it was an enticing proposition: sell your house quickly with minimal effort. No repainting, no repairs, no remodeling. You just walk away from your home.
There’s a catch, however (there’s always a catch). Those companies charge a fee that might be more than double the fee of realtors. And the sale price of your home could be $40,000-$50,000 below market value. Plus, if your home is in really bad shape, you still might be on the hook for some repair costs. As a home seller, your wallet gets hit three times. Ouch. That’s a huge financial blow to absorb all for the sake of convenience. Some people might be okay with that. Not me. If sprucing up my house nets me an extra $50,000 at closing, you can bet I’ll be buying some rollers and paint.
One of the biggest selling points featured by these disruptor companies is speed of the sale. You might not make a lot of money, but you could sell your home quickly. It seemed like a perfect option for anyone needing to “get out of Dodge.” Something happened, though, to the Phoenix real estate market: it took off like a rocket. Homes started selling for top dollar, and selling fast. Offers were coming in within hours of the home being listed. This eliminated the need for online real estate companies. Why sell your home at a discount when you could sell it just as quickly at full price? The market for these quick-sale online companies began drying up, leading to significant workforce reductions. In April of this year, Opendoor announced they were laying off 35% of their workforce. Online companies were never designed to provide maximum personal service, and now there are even fewer employees available to help you out. It certainly isn’t what we’d call a recipe for success.
Credit where credit is due: these disruptor companies were successful enough to make an impact in the real estate business. And they’re probably not going away completely. There will always be a market for those unable or unwilling to fix up their homes before selling them, or for those having trouble selling their homes. But that business model only works if sellers are willing to leave money on the table. In other words, when things are not going well, the online companies will be there for you with a dirty deal. Yuck.
Shelley Sakala is a local realtor with The Sakala Group.