The money-making secret to real estate? Socialize the risks to the seller. The #iBuyers are just now catching that clue – ineptly, as always.

This has been a slow-rolling epiphany on the part of the iBuyers. I’ve snarked about it here and there, but that’s all, so far. I wrote a ton about iBuying last Summer, but by now it all seems quite a bit less urgent. There are a lot more of them now, for one thing, and they sell like a niche offering – Ug-buys-ugly-houses with swankier web sites. Much worse, dumbasses who already could not evaluate properties are all at sea trying to price into dizzyingly volatile, madly divergent markets. And I thought they were screwed before 2020 came along…

So what’s their solution?

Socialize the risks to the sellers, of course.

After only eight years of pissing away investor funds brokering real estate without a business model, OpenDoor has discovered real estate brokerage: I sell it but you own it, and all I get is a sales commission – and even then only if I get the property sold and the transaction closed. Sucks to be the broker? It can – if the broker sucks. But the upside is that the broker pays only his marketing costs, with the seller bearing all of the ongoing carrying costs.

I sell fast with almost no costs on my end, so this matters less to me that it might to, say, iBuyers, who have demonstrated repeatedly that they can cling to inventory long after buyer feeding frenzies have devoured everything else. Offloading months and months of carrying costs onto the seller might actually point OpenDoor to a path to profitability – someday.

In passing: OfferPad is already cross-selling traditional listings, and, of course, this has been Redfin’s iBuying pitch all along.

And that pitch is what?

“You can either sacrifice your equity for quick cash, or you can risk your time, money and equity on the MLS.”

They won’t say it that way, but that is the actual alternative being presented: Lose now or risk losing later.

See anything wrong with that?

When I make my listing presentation, I am aligning my interests with the seller’s: “I make more when you make more.” In other words, I am promising to make my best possible defense of your interests, not mine – which is my fiduciary duty to you.

The brokerish iBuyers are doing the opposite: The are offering you two alternatives, both of which serve their interests ahead of yours. That would be the point of offering the choice, to put the risk of selecting the least-worst betrayal of your interests on you, as well.

I thought these dipshits would be smart enough to pretend-perish from the Coronavirus. Now it looks like it will take a class action agency-with-an-interest lawsuit to kill them.

I’m available to testify.