I would love to see iBuying results from other cities, because Zillow has a bad case of the yips in Phoenix, and I want to know if the problem is systemic – as I suspect it is.
What are the yips? In golf or baseball, the yips is the ceaseless cascade of meta-errors that result from obsessive over-correction. Zillow didn’t know they sucked at real estate until I told them. Now they’re trying to correct their errors without even bothering to identify them – as Thalia notes above in her own wry way.
How’d they do? In the second quarter, Zillow managed to lose a whopping $35,769 per house. But they beat that ignominious finish by 22% in the third quarter, losing $43,780 per ‘investment.’
Both OpenDoor and OfferPad managed to do better. As I’ve noted, OfferPad looks to me like it is angling for another round of funding, so it is listing less for better returns. Still awful, of course, as are all three Phoenix iBuyers, but OfferPad is the one that looks more like a business to me – and less like a badly-thought-out board game.
As iBuyers and their business models proliferate, I despair of apples-to-apples comparisons of all the many sorts of transactions. Consider EasyKnock, for example, which brings the sleaze of car-title loans to real estate: The buy and the resale can be separated by months or years as foolish homeowners volunteer to turn themselves into buy-and-hold tenants.
For now, I’ve backed off of more elaborate software, at least until I can sort it out better. Meanwhile, the spreadsheet I’m working from for quarterly reports is so robust, as revised this quarter, that the software I envisioned in May would not do much more than I am already doing.
You will note that none of the Phoenix iBuyers have quarreled with anything I’ve said so far. They don’t want to draw attention to what I am saying precisely because they cannot dispute it. If they could refute me, they would.