Home Selling Strategy. Should I sell my home to OfferPad, OpenDoor, Zillow, etc?
Many homeowners today have considered selling their home to companies such as OpenDoor, OfferPad or Zillow Instant Offers. But what are these companies, and is selling your home with one of these platforms in your best interest? Let’s take a closer look.
With slogans like “The easiest way to sell your home” and “Get an offer on your home with the press of a button”, it sure sounds tempting. No showings, no photos, no negotiating, and the ability to choose your own close date.
Strategy number one: Offer the customer convenience.
Let’s examine the business model that makes companies like these work. Firstly, let’s call it like it is, these are businesses. The primary goal of any business model, of course, is to make money. In order to make money buying and selling real estate, you must buy low and sell high.
The short term strategy of buying low, renovating, and selling high, in the real estate world, is called flipping. Make no mistake about it, these are giant flipping companies. They have no intention of buying your home, holding onto it for a year, and waiting for the market to appreciate. That’s too risky, they need to turn a profit now. They also have absolutely no intention of actually moving into the home. To be successful, the flipping company must purchase your home for less than market value, renovate the property, then turn around and sell it for said profit.
“But they offered me a fair market value price!”
Strategy number two for the flipping company is to present you with an offer that, on the surface, seems fair. You accept the offer and go under contract. You pick your close date and plan your move. Easy right? But wait, there’s more.
Once under contract, the flipping company will conduct a home inspection, similar to a traditional home inspection, but with one major difference. Not only will they be looking for issues that the home may have such as leaky faucets or squeaky doors, but they will be assembling a list of upgrades and renovations that they deem necessary to resell the home.
These upgrades may include new flooring, new cabinets, new granite counters, new paint, new roof, new fixtures, new appliances, etc, etc. Guess who gets to pay for these? Yep, you do. In a traditional sale in Nevada, after the home inspection, the buyers will submit what’s called a request for repairs. They may ask that you fix that leaky faucet or squeaky door. In our scenario here, the flipping company will submit a request, but it’s not just for repairs.
They may call it a ‘renovation credit’, ‘concession allowance’, or some other fancy terminology, but rest assured they will be requesting major money for renovations, likely in the range of tens of thousands of dollars. By the time you have received this request, which will be several weeks into the process, you have already planned your move, packed your belongings and possibly
even purchased your new home. You certainly could turn back at this point, but the company is banking that you won’t. Again, convenience.
At the end of the day, what these companies are selling is convenience. And they are betting that you are willing to exchange some of the equity in your home for that convenience. This ‘convenience fee’ is in addition to the 7-10% in other fees they charge upfront.
To be fair here, there are most certainly some situations where the value of the convenience outweighs the $20-$50 grand in equity that you’d be giving up. But for most red blooded Americans, getting the maximum dollar amount out of their home is the primary objective.
The most effective way to get the maximum sale price for your home is to put it on the open market with representation from a licensed, experienced real estate agent. Convenience or cash? The choice is yours.
Patrick Group & Southwest Las Vegas
The more familiar realtors are with the neighborhoods in their area, the better they are able to sell a home. Chris Patrick with Signature Real Estate Group knows Southwest Las Vegas real estate and can help you sell your home quickly at fair market value. Fortunately, the Southwest Las Vegas real estate market is definitely on the rise right now, as people discover its amenities beyond just being close to the strip. If you’re looking to sell in this area, let our real estate agents help you find the most qualified prospective buyers based on your location.
Being from the area, you receive the benefits of learning about great neighborhoods, trends and hot spots.
Are you thinking about relocating to Southwest Las Vegas? I can help you find the perfect home and make your move as stress-free as possible. I can offer valuable insight about the area to help you through your home buying experience. Contact Me at 702-306-0814.
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