The Real Estate REplay
Host Wendy Gilch, and a rotating cast of expert co-hosts, break down the good, the bad, the unethical (and sometimes illegal) things other sellers and buyers experienced while buying or selling a home.
Learn what went right, what went wrong, what they would do differently and how to spot red flags before they become a problem.
The Real Estate REplay is powered by consumer advocate group, Selling Later.
www.sellinglater.com/resources
The Real Estate REplay
Data in 10: The other ways iBuyers profit with your personal information
New Data In 10 (or less) episode!
Peel back the curtain on real estate's shadowy corners with us, as we expose the truth about industry practices that could be dipping into your pocket without you even blinking an eye.
This episode brings you a raw look at the iBuyerss. As they make their way back to the market with big marketing dollars to spend, it's important that you understand the many ways they make money off of you (it's not just from buying your house).
Learn about iBuyers like Opendoor and Offer Pad, and discover the real cost of those tempting cash offers. From commission structures that may not always have the seller's best interests at heart to the goldmine that is your personal data—our new data in 10 episode on ibuyer's hold nothing back.
Discover "Data In 10," your go-to resource on companies selling your information (in 10 minutes or less). As new FCC rules reshape the real estate landscape, it's crucial to understand the impending changes and their impact on you (consumers) and the value of your information.
Before the new rules take effect, we're committed to educating you on the myriad companies profiting from your data. Uncover the true value of your information and how, often unbeknownst to you, it's traded. The potential impact is significant – your data's value influences the quality of service you receive and can affect the fees and commissions you pay.
Pay attention and protect your data!
State laws and regulations may vary.
Have a story you would like to share with other sellers or buyers?
Hit us up here.
Your personal information makes this real estate industry a crap ton of money and, with the new FCC rules coming into play, that will hurt the data sellers' pocketbooks and likely make your information more valuable. We think it's important to remind you of all the companies that are making money off of you, even when you don't even realize it. In between episodes, for the rest of the season, we're going to do data intent, in which we highlight a company or segment of the real estate industry and share how they sell your data to make money, and you don't know what's happening. Let's go Welcome to season four of the real estate replay. This season, we're continuing to share the good, the bad, the unethical and sometimes illegal experiences that sellers and buyers have had to help you not get screwed over. But we're also going to spend time talking about the many lawsuits floating around the industry and how they can impact you, perhaps even sprinkling a few episodes explaining how all these quote unquote helpful companies are making a crap ton of money off of you. For today's data intent, we're going to talk about iBuyers, and, while they may have found themselves in trouble last year by selling homes for less than they paid, ibuyers like Open Door and Offer Pad are re-entering the market big this year and making money in ways you probably don't even realize. So let's first talk about the way iBuyers traditionally make money. That you're probably aware of.
Speaker 1:When a home seller considers using an iBuyer, they fill out information online and receive a response with a cash offer based on the company's algorithm. That algorithm counter got them in trouble last year, but no, it's okay. This offer is typically less than the market value of your home and charges fees ranging from 5% to 8% of the sale price, and it usually requires some sort of home inspection before you close. From their reviews that we have read, most home sellers said the iBuyer reduced their offer after they did their inspection. Upon closing, you move out and the iBuyer comes in to, quote unquote, freshen up the home. Sometimes it's just a slap of paint in new carpet, while other times it could be improving and updating the kitchen and sales that we tracked last year, companies like Open Door typically listed the home for $60,000 more than what they paid for it. We've also noticed that iBuyer homes often sit on the market just a little bit longer than other houses, which sometimes can be related to overpricing, because you will get less free from your home but still pay about the same in service fees if you use an agent. It's safe to say that most home sellers use this service because they prioritize convenience over equity or need immediate funds. What typically isn't discussed is that if your real estate agent recommends you to use an iBuyer before you list the home, sometimes they can collect a really nice commission for not doing a lot of work and it ends up coming out of the fees you pay.
Speaker 1:Open Door incentivizes agents with a 1% commission but bonuses for more homes they sell to Open Door. For the first four homes that the agent gets sold to Open Door instead of putting it on the market, they get 1% of the sale price. For five homes they sell in a year or two Open Door, they get 1% plus a $5,000 bonus. For the sixth to ninth home, they get 1% plus $1,000 each and basically every five homes they sell to Open Door, they get the five grand bonus. Offer Pad, on the other hand, has now been promoting that they're going to pay agents 3% if their client sells their home to them instead of putting it on the market. They also are now giving that same agent the opportunity to then sell the home for Offer Pad once they relist it on the market for an additional 1%.
Speaker 1:But here's what most of you don't realize, For data and real estate is worth a lot of money. Companies like Zillow, dave Ramsey, realtorcom, which is operated by News Corp, not the National Association of Realtors, homelite and pretty much every other best agent website except for selling later, of course can get up to 40% of the commission your agent makes when you close, all because they passed along your information. Ibuyers are no different. When you decline their offer, they know you're considering selling and will offer to connect you to a partner agent. That partner agent is someone who's willing to either give the iBuyer 30% to 40% of the commission they make off of you or pay a hefty fee to be the ZIP Code-sponsored agent for all the declined offers in a specific area. Some iBuyers purposely even take offer requests from sellers in areas that they know they're not going to buy within for the sole purpose of turning around and selling that data to a real estate agent who's willing to pay for it.
Speaker 1:Programs like this could impact how much you're expected to pay as a client, your chance to negotiate with your agent and, not to mention, severely limit your choice of agents, if any at all.
Speaker 1:But the most humorous part of all of this is that majority of these iBuyers, when they first came out, claimed that they were going to remove real estate agents and truly disrupt the real estate industry. They all end up changing their tune because they realize they can make money off of selling your data to an agent that's desperate enough to pay for it. And you, the consumer, pay for all of this with the service fees. To sum it up, ibuyers are for convenience, not maximizing your profit. If you're looking to retain the most of your equity, listing your home on the market, with or without an agent, will likely get you a higher sales price. Find your own agent. Stop letting companies find you a partner agent. So you have the best opportunity to find a good agent, a quality agent, and one that will let you negotiate their commissions and fees, because they don't have to pay someone else. If you have a story or a question you want to share, hit us up at therealestatereplaycom.
