Welcome to Coldwater Springs, very much my world. I’ve represented a lot of sellers and buyers in there, and we manage nine rental homes in that community. I can price to the dollar almost anywhere, but nowhere so well as there.
You’re looking at the active market in the community right now, but only six of those homes are actually Active, with the other 14 being under contract. Interestingly, of the six still available, two are OpenDoor listings. Bread-and-butter homes are evaporating in the dry desert sun, but iBuyers still manage to sell very, very slowly.
What’s the problem? Price, first and always. Take 11913 W Jefferson Street, for example. It’s listed at $259,000, a stupidly-obvious-liar-price, where Fair Market Value for that house is $240,000. How do I know? I just priced that floorplan for a client yesterday. And I just sold the house next door – in four Days On Market. Here’s the fun part: The dipwads paid $246,400 on the way in.
OfferPad has that same floorplan (the Lavender, my all-time favorite) at 12502 W Jefferson Street. The price is 254,900, also an obvious lie, but this one has a pool, so the number is not awful. Even so, they’ve owned it for 90 days, and it took forever to get it sold. They bought well – $238,588 – so give them that much.
New agents master this hard fact of realty, or they do not last: It still has to appraise.
The seller wants to start high? It still has to appraise. The buyer wants to overbid? It still has to appraise. The seller wants to take the absurdly-over-list FHA offer – with 3% conceded to the buyer in closing costs? The house still has to appraise.
Cash buyers can buy stupid – as our #iDiot colleagues love to demonstrate. Financed buyers can only buy as stupid as the stupidest lender they can scrape up. So stupidly over-pricing iBuyer listings is even stupider than sleazing them up with liar list prices. Even if you can get a sucker to bite – eventually – it still has to appraise.
But I think the iBuyers have an even worse problem: Winning is closing, and no closers seems to be an impediment to… closing…
They do everything they can to get in their own way, but I think their big selling point – self-tour, no agents – is killing them. Their target-market is already heavily skewed toward analysis-paralysis, and the absence of a closer on the scene can only make matters worse. Buyers shopping only within the iBuyer’s app will have no expert on hand to disabuse them of bad ideas.
At some point, I’ll look to see who does a better job for the iBuyers – their apps or MLS-solicited Buyer’s Agents. From their results, the very best marketing strategy would be to list their properties with serious rainmakers, optimizing for Days-Out-Of-Pocket, as straight-commission sales. Nothing incents like incentives, and iBuyer employees market like… employees…
Meanwhile: Closing without closers does not seem to be working.