Posted

I love technology. I think that the more tools people have to ease the stresses of moving and creating wealth are generally a good thing for our society. HOWEVER!!! Uberizing moving for most Americans may just line the pockets of the companies in Silicon Valley. Tech companies don’t always know or care to know all the housing laws. This last week, The Housing and Urban Development Department sued Facebook for housing discrimination through willful ignorance of filtering ads, targeting specific markets, and filtering newsfeeds. For the last decade, 99% of real estate agents have advertised listings on Facebook unaware of how they were not complying with the Fair Housing Laws of the US. 

For-sale-by-owner Disruptions

RUListing is trying to disrupt the For-sale-by-owner market by “privately” connecting buyers and renters to sellers. Fair Housing Laws apply to For-sale-by-owner once they advertise.  “Explore the by-owner market with RuListing, or read more about how to buy, rent or sell a home privately.” Any real estate agent would be in violation of that tagline.  It’s on the front page of RUListing. Selecting the choice “Advertise My House” from the website gives you the subscription fees there is zero mention of fair housing laws and how not to discriminate. It is just a matter of time before RUListing gets hit with unfair housing violations. Their tag line is What could go wrong? Without regulations in place, this is the fast-track to redlining and blockbusting.  Zillow has been accused of allowing sellers to racially discriminate though they have yet to be sued.

Buying and Reselling Homes Disruptors

The new technology disruptors are buying homes and then reselling them as a replacement for the market place. Companies like Zillow, OpenDoor, Purple Bricks, Rex Homes, Home Vesters, Point Green Home Solutions, etc. are offering to buy your home any condition, and then sell you a new home like a car dealership. Trade-in your old home for pennies on the dollar applied to a newer home. Does that sound like a good idea for your bottom-line as the consumer? What typically happens when you trade-in your car? How many consumers have walked away feeling like they got a great deal on the sale of their old car? What the business model for the venture capitalists is really, buy any house at it’s cheapest, maybe fix it up, and then sell it for the most profit. What happens when they buy 10 properties in a neighborhood?  A neighborhood market’s sale price is usually dependent on nearby home sales. The price of all properties in that neighborhood will drop. Do you honestly think if a neighborhood’s price drops the company will lower the price? The company can hold those homes for years waiting for the market to go back up. Can most people?  

These companies inflate the traditional market costs to make themselves look cheaper and dimish the value of real estate agents. How often do you get better service from a company where you have to call an 800 number, check FAQ’s, or watch a video how-to before you can have your issue solved? 

How many real estate agents are going to go out of their way to show homes that offer little or no fees to the buyer’s agent? 

If you look at home sales of the last couple of years, how effective at negotiating were the Redfin and Zillow agents? Did those sellers really get a good deal if the buyer negotiated once in a contract?

Market Data for Performance of the Disruptors.

In my market of Benicia, California in the hot of 2018 to warm seller’s market of 2019. The data is from 01-01-2018 to 4-5-2019. Here are some statistics*

381 houses sold

68 withdrawn or canceled from the hot market

Traditional Brokerages sold 373 with 66 withdrawn/canceled

Disruptors listed  and sold 8 with 2 withdrawn/canceled

Traditional Brokerages SOLD 97% of the homes!      The withdrawn/canceled rate of 17%.

The Disruptors sold 3% with a 25% withdrawn/canceled rate. Of the 8 sold 1 sold for $100 more and 2 for a total of $60,000 less! THOSE ARE POOR NUMBERS.

Faira.com 1 listing
1 listing in the hot market they got a whopping $100 over the listing price! This is the success story of my market for these disruptors.
Redfin 4 listings
1 withdrawn/canceled
2 houses sell for list price, no bidding wars, 1 took 60 days to sell
1 listing that sold for $32k less! No savings of commission for the seller they actually lost money. The buyer’s agent clearly was a better negotiator.
mylocalrealestate.com 1 listing
1 listing that sold for $25k less than listing price!
homecoin.com 3 listings
1 withdrawn/canceled
2 listings sold for listing price
HelpUsell.com 1 listing
1 listing sold for listing price

 

*Averages are based on information from the Bay Area Real Estate Information Services, Inc. (BAREIS) for the period of 1/1/2018 through 4/5/2019. Information has not been verified, s not guaranteed, and is subject to change.

Licensed real estate agents and REALTOR®s, actually provide value for those commission fees.

 

We help you determine the value of a specific property in the market that you are buying or selling in. 

We manage contracts and the project of buying or selling your home.

 

We negotiate the sales price, terms, and items once in a contract that you want.

We listen to your needs and wants and don’t try to fit you into a database form.

 

We are available to you with knowledge and respect. We are not an 800#, a list of FAQ’s, or short how-to videos. 

Most important, legally we are bound to be your fiduciary advocate.  We are not bound to a company’s bottom line or shareholders.