For the past two months, I have documented in detail all the ways in which the Phoenix iBuyers are catastrophically inept at reselling the homes they have purchased. To this onslaught they have challenged nothing. You might take that to mean that everything I have said is true. In my turn, I wonder if things might even be worse than I have seen.
◊◊◊ Spanking the Phoenix iBuyers: OpenDoor, OfferPad, Zillow, The Bottom Line.
I love it that they read me so avidly. I can’t tell if I’m policy or protest at OpenDoor, but few doors there seem closed to me. I think it’s funny that none of them have the guts to ask a question – or even issue a yelp of anguish. But I swung in Zillow’s orbit for a year-and-a-day and no one ever thought to ask me an intelligent question – although they did cough up a few dumb ones.
Here’s the deal: The job is moving the product. Why? Because close of escrow is Consideration Day for everyone who is to be paid. Winning is closing, and if you can’t get your deals all the way closed at a net profit to you, you cannot last in real estate.
Worse news for iBuyers: You cannot socialize the carrying costs of your resale inventory to the unsuspecting sellers. You are the seller – and the unsuspecting schmoos are your investors.
So it is stupid-beyond-stupid for the three big real estate retailers in Phoenix to suck so badly at selling real estate. You can read me in depth to find out the how and why, but you should be reading me in depth, anyway; they are.
But given that they are inept at real estate – the actual business they are in, despite all the shifting-sands demurrers – my next question seems to fall like a hasty acorn:
What else are the iBuyers inept at?
I believe they’re bullshitting about pricing algorithms, for example – supported by first- and second-hand evidence. Their forward-looking claims are rife with the static-market fallacy (after this, nothing will ever change again). And none, apparently, are aware that retail is reputation.
When I walk into a supermarket, the first thing I look at are the floors. If they don’t gleam from being buffed every night, I walk right back out. Why? Because the manager just told me he doesn’t give a shit about the milk or the meat, either.
When you suck at one job, it’s likely you suck at every job. But when you suck at the only job that matters – moving the product – my guess is that either you’re not serious or you’re not trying hard enough.