{"id":18740,"date":"2022-07-13T05:47:57","date_gmt":"2022-07-13T12:47:57","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=18740"},"modified":"2022-07-13T05:47:57","modified_gmt":"2022-07-13T12:47:57","slug":"opendoor-shows-the-world-how-the-ibuyer-idea-will-die-death-by-days-on-market","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/18740\/opendoor-shows-the-world-how-the-ibuyer-idea-will-die-death-by-days-on-market\/","title":{"rendered":"#OpenDoor shows the world how the #iBuyer idea will die: Death by Days-on-Market."},"content":{"rendered":"

\"\"

\u201cIf a slacker employee was mysteriously transformed into a house for sale…\u201d<\/p><\/div>Ask any old-timer in real estate what’s wrong with the iBuyer idea and he’ll tell you right away:<\/p>\n

“What happens when the market turns?”<\/strong><\/p>\n

It would be charitable to argue that the iBuyers actually thought this mishegoss would work. Perhaps that’s so: They’re flippers, except they are very bad at every part of the flipping process. And they’re pawnbrokers \u2013 buyers of last resort \u2013 except they buy first, not last, paying top-dollar for the honor, then cling to their assets like precious prodigal sons.<\/p>\n

Brokering<\/em> real estate works for almost nobody, but it only<\/em> works because the broker does not own the asset. Owning non-producing assets as “investments” is insane. It can only work if you buy at deep, deep discounts \u2013 like flippers and pawnbrokers do, and like OpenDoor apparently cannot do.<\/p>\n

So: Closed Sale Price compared to Original List Price, on average: April -$9,537, May -$16,935, June -$31,698.<\/p>\n

Those are from Phoenix. Perhaps they’re doing better in other cities, but this is their primal market and ground zero for all things iBuyer. I think we’re seeing how they work.<\/p>\n

The trend on Days-on-Market is not great, and I would expect it to get a lot worse: April 41, May 40, June 48. By June the market had well and truly turned, but in April they should have been moving everything in single-digit DOMs. That they were not \u2013 and that they score so few winners in pricing, amidst so many huge losers \u2013 tells you how they will do, going forward.<\/p>\n

The problem, as I have been saying for years, is that even if<\/em> they bought right, which they don’t, and even if<\/em> they rehabbed and marketed right, which they don’t, they would still<\/em> own the “investments” far too long, resulting in killer carrying costs.<\/p>\n

The delusion in iBuying emerged from two ploys from the Federal government, suppressing interest rates for home-buyers and also for Wall Street. Yippee! Practically-free money to buy assets that seem only to go up in price…<\/p>\n

Ahem.<\/p>\n

Imputed losses per “investment” will get uglier by the day \u2013 Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cIf a slacker employee was mysteriously transformed into a house for sale…\u201dAsk any old-timer in real estate what’s wrong with the iBuyer idea and he’ll tell you right away: “What happens when the market turns?” It would be charitable to argue that the iBuyers actually thought this mishegoss would work. Perhaps that’s so: They’re flippers, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[29,542,6,5],"tags":[],"class_list":{"0":"post-18740","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-group-therapy","7":"category-ibuyers","8":"category-marketing","9":"category-real-estate","11":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":16626,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/16626\/whats-your-new-ibuyer-strategy-steal-this-script-and-run-with-it\/","url_meta":{"origin":18740,"position":0},"title":"What’s your new #iBuyer strategy? Steal this script and run with it.","author":"Greg Swann","date":"August 21, 2020","format":false,"excerpt":"When I built iBuyerSpy.com, I had anticipated writing software that would have generated the main content of the site. This never happened. I ended up blogging there, which I should have done here \u2013 an error I am now correcting. By now, the big-foot iBuyers have switched to upselling traditional\u2026","rel":"","context":"In "iBuyers"","block_context":{"text":"iBuyers","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ibuyers\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/ThaliaRelocated.jpeg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":17955,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17955\/overnight-news-big-budget-ibuyers-manage-to-suck-even-worse-even-in-the-easiest-real-estate-market-ever\/","url_meta":{"origin":18740,"position":1},"title":"Overnight News: Big-budget iBuyers manage to suck even worse \u2013 even in the easiest real estate market\u00a0ever.","author":"Greg Swann","date":"March 11, 2021","format":false,"excerpt":"There's iBuyer news today \u2013 half truth, half lies \u2013 but, as usual, the big news is missing: The big-budget iBuyers are by-now swarmed by many, many mini-iBuyers. Hardly anyone knows how to build a magnetic website, but lots and lots of people know how to flip houses. Here's more\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":17336,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17336\/the-ibuyers-are-super-good-at-mulcting-buyers-agents-with-science-thats-why-they-cant-price\/","url_meta":{"origin":18740,"position":2},"title":"The #iBuyers are super good at mulcting buyer\u2019s agents with science. That\u2019s why they\u00a0can\u2019t\u00a0price.","author":"Greg Swann","date":"October 20, 2020","format":false,"excerpt":"Mike DelPrete is worth reading, so long as you understand that, like The Inglorious Knob, he is one with The Borg. Just lately I mentioned that the iBuyers in Phoenix are nicking buyer's agents for commission \u2013 which is just the kind of dick move you expect from financially-inept sociopaths.\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/10\/aidan-bartos-v9rZ3Yz6fSg-unsplash-1-480x320.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":18457,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/18457\/overnight-news-if-the-ibuyer-idea-is-any-good-whats-the-rush-to-go-public\/","url_meta":{"origin":18740,"position":3},"title":"Overnight News: If the iBuyer idea is any good, what\u2019s the rush to go\u00a0public?","author":"Greg Swann","date":"September 7, 2021","format":false,"excerpt":"As a matter of news, OfferPad went public last week \u2013 meaning none of the iBuyers are now backed by wide-awake entrepreneurs, just pie-eyed punters. The \"offering\" was done by Wall Street chicanery to avoid even the casual due diligence white-shoe investors normally do. But, of course, no due diligence\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":18590,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/18590\/overnight-news-gaming-artificial-intelligence-is-as-easy-as-selling-your-white-elephant-to-an-ibuyer\/","url_meta":{"origin":18740,"position":4},"title":"Overnight News: Gaming \u201cArtificial Intelligence\u201d is as easy as selling your white elephant to an\u00a0iBuyer.","author":"Greg Swann","date":"November 10, 2021","format":false,"excerpt":"Here's a true fact about iBuying: The sellers are gonophs. Home-sellers are often gonophs, of course, and, even if not, the information asymmetry runs all their way: Neither your Buyer's Agent nor your home inspector is likely to identify that semi-annual drainage problem. But many of the sellers who turn\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":17511,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17511\/overnight-news-is-the-incumbent-is-now-the-real-estate-broker-elect-market-swing-threatens-overdue-shellacking-for-doe-eyed-ibuyers\/","url_meta":{"origin":18740,"position":5},"title":"Overnight News: Is \u201cThe Incumbent\u201d now the Real Estate Broker-Elect? Market swing threatens overdue shellacking for doe-eyed\u00a0iBuyers.","author":"Greg Swann","date":"November 22, 2020","format":false,"excerpt":"Seen any commercial TV lately? Have you spotted ads from local real estate vendors offering to make cash offers for homes \u2013 right now, on the spot, in any condition? \"That's not really iBuying!\" the iBuyers will shout \u2013 and it's true. It's flipping Homevestors.com-style \u2013 Ug's uglier offspring. What\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/18740","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=18740"}],"version-history":[{"count":3,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/18740\/revisions"}],"predecessor-version":[{"id":18745,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/18740\/revisions\/18745"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=18740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=18740"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=18740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}