| >>>> First, they use scale and data science to find what they consider under-priced homes and buy them for cash. If I happen to find the same home for sale at the same time, what seller is going to go with a traditional loan over a full cash offer who could easily offer more if needed? I can’t compete with that. Loan offerings compete with all cash offering by offering more than what the cash offer is offering. The idea that you bid over asking and the cash offer will find out what you bid and meet your offer in cash is just not true. It’s not like an auction house where you each bid until one of each persons max has been reached. Seller agents just opt for the max for each offer from the start. >>>> Secondly, they don’t do anything to the house (aside from clean it up and taking nice pictures—no value added) and then resell it for multiple tens of thousands more than what they just paid. If this house was originally at the high end of my budget, bought by Zillow, then re-listed for more, I can no longer afford it. It costs tens of thousands in fees and cost to transfer ownership. I have a hard time believing they buy a home, clean and take pictures, then relist. Houses that are relisted in less than a year raise serious eyebrows in the industry as well. As to your third point. The homes are worth only what a buyer is willing to pay. Period. All too often I’ve seen homes sell for less against a similar home right next door sell for less from the exact same builder with same features and sq footage within weeks. This post is mostly for others looking to buy because you have in my professional opinion, unrealistic expectations and understandings of how the housing market works . |