[emodendroket]

Who's "they"? This article seems to mostly be about OpenDoor offering to buy homes not in need of major repair and turn around and sell them in 90 days, all while collecting smaller-percentage fees that traditional sellers would. I'm not sure this model is as crazy as you're making it sound.

> “The vast majority of investors who hear about it initially think it’s a bad idea,” said Stephen Kim, an analyst at Evercore ISI, a market research company. But the skepticism often fades as they realize Opendoor makes money by providing a service to home sellers, rather than on price appreciation, Mr. Kim said. Even if the company breaks even on a sale, the transaction fees are a meaningful business.

[JoeAltmaier]

Gotta deal with the lemon issue though. You make one mistake buying, and you have a quarter-million-dollar problem. Takes a lot of transaction fees to recover from that?

[emodendroket]

Sure, but how is this different from the problem faced by, like, CarMax? If your volume is large enough it doesn't matter.

[JoeAltmaier]

All about the rate of mistakes - even a negligible error rate means millions lost a year.

[emodendroket]

It's likely that they'll make money just on flipping the houses in many cases and even in the lemon case it will not be a total loss. Even in the very worst case, where the house absolutely cannot be salvaged, the lot is worth something (I think the lot is around half the value of my property, for instance). If the house just needs more extensive repair than expected that's a smaller loss.

From the perspective you're talking about, the risk to an individual buyer of missing some serious issue in an inspection is far greater than it would be to a company buying up homes left and right, and they've minimized this risk by focusing on a relatively specific slice of the market (newish houses with no serious known issues and with a value of $250-500k).