Zillow buys houses
By the end of the year Opendoor and Zillow plan to offer instant offers to sellers who want to sell quickly and with little fuss. These companies have tried it in other markets and apparently it has gone well enough to expand to our market. How will this affect our industry? That is TBD, but they aren’t looking for distressed homes. They are looking for houses around the median value that don’t appear to need any major improvements, and a homeowner who doesn’t want to hassle with putting the house on the market. They mark them down, take a commission and immediately re-list the house after purchase. Their model doesn’t work on distressed properties, so fix and flip buyers will still have opportunities. Maybe after a seller gets rejected, they will be more open to talking to an investor!
How does Opendoor and Zillow make money? If you want to see an example of how this model works, click here.
Mortgage rates and Fall
The market is slowing down and there are two causes: mortgage rates are rising and Fall is upon us. Which of these has the biggest impact? You would think it was mortgage prices, but in Colorado, it’s more likely that Fall is causing prices to drop. There just aren’t very many people looking for houses this time of year. I suspect that buyers will start looking again around January and throughout the Spring. After a hot summer, the cool weather slows us down, not to mention football season and Rocktober. If you have a house on the market, price low and hang in there. If you flip houses, what a great time to buy!
QUOTE OF THE WEEK
“An investment in knowledge pays the best interest.“
See you soon,