LOCAL is BETTER

ZILLOW ABANDONED THE MARKET AND LEFT HOMEOWNERS SCRAMBLING

Hey everyone,

I’m Kevin and I am a local home buyer in the Dallas-Fort Worth area.

I wanted to take this opportunity to talk to you about Zillow Offers and the other ibuyers like Opendoor, Offerpad, Redfin, and many others, that are backing out of making offers and even backing out of pending contracts, which is going to leave a lot of people in very tough situations.

Who ARE “ibuyers”

First, let’s briefly discuss, who “ibuyers” are for those who don’t know. “Ibuyers” is short for “instant buyers”. They are large national organizations that make cash offers to buy homes that are backed by large venture capital investment groups. These companies work on very thin margins and most have not yet reported turning a profit and even reported some like Zillow Offers reported an average loss of $6,400 on each home sold in 2019.

They are mostly online based buyers that have very little in person interaction with their customers. They don’t generally meet people in person prior to signing a contract and entering into a deal.

There are often several different ibuyers operating in larger markets, like ours in Dallas-Fort Worth where the top 4 ibuyers are Zillow Offers, Opendoor, Offerpad, and Redfin Now. They operate on volume based business models, trying to grab market share (probably so they can sell off at some point).

Are “ibuyers” good companies to work with?

Many stories of homeowners that have worked with them suggest that they are unreliable and less straightforward than many smaller local homebuyers. Their recent decisions to withdraw from the market and cancel existing contracts seem to give credibility to those criticisms.

In response to Coronavirus (or COVID-19), ibuyers have suspended all instant offer programs and even canceled an unknown number of active or pending contracts. It doesn’t seem like a trustworthy way to run a business with integrity and transparency when they promise to make a deal and fulfil a contract, only to decide not to follow through when it no longer suits them. 

You might ask, how can they do that?

Part of the problem is that, supposedly, they often don’t offer any earnest money deposits on their contracts. And while that’s a different conversation for a different time, the long and short of it is, don’t work with buyers that aren’t willing to put down earnest money. It is a standard and traditional practice in the real estate business and it shows that you’re a serious buyer and it offers a good faith payment to sellers up front so they know that you are willing and able to perform on the contract.

Why Did The Ibuyers Abandon the Market?

Recently, Zillow and Opendoor put out public relations statements that they were backing out because of public health and safety concerns.

While those concerns exist in today’s world, there are many responsible ways to conduct real estate with the technology that’s available in today’s digital world. They claim to be in the business of helping people by offering sellers an alternative solution to the traditional market with instant cash offers and a hassle free process.

It seems that a company that claims to offer solutions to make people’s lives easier shouldn’t just cut and run (especially when people need them the most) at the first sign of difficulty and new challenges to solve.

If you ask me, a very telling part of the story is that Zillow is still actively trying to sell the homes they have already purchased through their instant offers program. If they were so concerned with health and safety one wouldn’t think they would continue to engage in any transactions.

Another telling example of their motivations came in an initial statement that their decision was based on uncertainty in the market and difficulty accurately pricing homes.

And I’m sure that was the truth. That is the reality of the market right now. They had to respond to questions quickly and they didn’t have their PR statement ready yet, so they told the truth.

At the end of the day, it looks like they are really only concerned with protecting their VC money and their bottom line. They have razor thin margins and even with all the money in the world, if they have enough consistent losses they might be facing an unrecoverable situation.

And frankly, it would seem that their PR team got it absolutely wrong. Theoretically, they would be a good option for people to work with when people are worried about the health and safety concerns the world is currently facing. Even before Coronavirus, their process offered a minimal contact service.

Sellers go online, ibuyers make an “instant offer” (only reason it’s instant is because it’s BS), a representative negotiates over the phone or through email, and then the only time you would ever actually meet in person would be at the inspection (HA, the inspection…their excuse to steal your money and lower their offer by tens of thousands of dollars), which a seller isn’t required to be present for.

All this seems to show that ibuyers are not really concerned with serving the needs of the communities they operate in, rather they are concerned with preserving their profit model and everyone they’ve made commitments to are just numbers on spreadsheet.

Why Are LOCAL Buyers Better?

The disappointing (but not surprising) fact that Zillow, Opendoor, Offerpad, and Redfin have backed creates a problem for sellers in need by leaving them with less options. But you know, that’s the problem, they’re not local. That’s why they’ve cut and run.

There are still options for those that want or need to sell properties and I would argue that LOCAL homebuyers and investors offer a better service that the ibuyers can’t match in the first place. Our company, Inspire DFW Real Estate Solutions is dedicated to customer service, working with individuals to create solutions that fit their individual needs, and creating relationships based on honesty and integrity, so those we work with can be confident that they can depend on us to follow through on our commitments and have their back no matter what happens.

We as local homebuyers, live and work here, we have been a part of the Dallas-Fort Worth community our entire lives, and we’re not going anywhere. We care about this community and we know that it is our responsibility to stay engaged and help our friends and neighbors navigate the challenges ahead. 

We want to provide value, serve, and support DFW. That’s why, unlike the ibuyers, we work with homeowners in any situation that need help. When a homeowner needs to sell their home, we want to be available to help. As unemployment number continue to rise during this crisis, more and more homeowners are going to need solutions to stay financially afloat.

This is a time when people are going to be facing even more problems and we at Inspire DFW would to be a part your solution. If you’ve had Zillow, Opendoor, Knock, or any other ibuyer cancel a contract and you need help, were here for you. 

We specialize in creating solutions for people that have real estate problems and we don’t just look at a one size fits all approach. There are a lot of different solutions to real estate problems, not just making cash offers and we would love the opportunity to help you solve your situation. Please fill out our form below and we will contact you to better understand how we can help.

In Closing

I suppose it’s something that everyone has to decide for themselves, but situations like this make me wonder if large tech-giant companies like the ibuyers are worth working with. They just don’t seem to have a dedication to customer service or to doing what’s right (integrity/honoring their commitments).

I often find that I have much better experiences when I work with small, local based businesses that care about their community, care about customer service, and care about providing value to people by help them solve problems and serving their needs.

I like to be able to look someone in the eye, know who Im working with, get a feel for what they are about, and decide if I can trust and depend on them.

That’s why when we make offers, we make sure we can stand by those offers and can perform on them. We don’t just cancel a contract because some random event comes along and changes the game a little bit.

If you do need help, please don’t hesitate to reach out on our website or give us a call. We love being part of this community and we would love the opportunity to help our neighbors.. We’re going be available to keep buying homes and working with people to serve our community.

It’s disappointing that other company’s don’t see things the same way. Again, if you need help, please reach out, we would love to help you.

If you don’t want to waste your time with a company like Zillow that sees you as just another number on a spreadsheet, if you want someone to have your back no matter what happens, please consider working with us at Inspire DFW Real Estate Solutions so we can show you the benefits of working with a local company that cares about you.

We want to wish everyone health, happiness, and brighter days to come.