In the last few months I have had several students, ex-students, investors, Realtors and friends ask me some version of "What's the deal with OpenDoor?" Here's my take, but you go do your own research. They are coming into our market in a BIG way, so love'em or hate'em, if you are going to do Real Estate in the Metroplex you better understand'em.
OpenDoor is
HomeVestors, with better funding, better AVMs and thinner margins.
While OpenDoor
will not replace wholesalers, they will make tight markets even tighter -
especially in non-disclosure states where accurate comp data is difficult
and expensive to obtain - and skinner margins even thinner.
For a while. Then
they will run out of money and fizzle.
A similar effect
occurred when Zillow entered the market. Everyone got excited, Zillow was going
"disrupt Real Estate," and "change the paradigm," and all
the other marketing BS the techno-weenies in Silicon Valley spew
about Real Estate (and every other cause celeb bandwagon they jump on trying to
make a buck by automating everything - anyone remember web-based grocery
deliveries?) BECAUSE THEY DON'T HAVE A CLUE ABOUT HOW REAL ESTATE
WORKS IN THE REAL WORLD.
What lasting
effect has Zillow had on the market? Not much, other than to provide one more
hurtle investors and Realtors have to overcome when instructing sellers on the
true value of their home. "No ma'am, your home is NOT worth 110% of ARV
simply because it is yours and it smells like your wet dog."
OpenDoor is
already facing huge Realtor backlash (one recently told me "No one in our
office will show an OpenDoor listing.") both online and off. That will
only grow. And home-sellers desperate to sell will initially light up OD's
switchboards - and then blast them on Yelp when they get offers blindly emailed
to them that are at the high end of the wholesale spectrum, but without
the kiss (building rapport) first to make it palatable.
So go to your
local REIAs, talk your wholesalers friends down off the
ledge, educate your fellow Realtors and investors, lean your shoulders
into this small rain shower, and remind yourself that the "disruptive
storm clouds gathering in the distance" are little more than 15 minutes of
fame rain shower that will quickly pass over us and then allow us to get back
to work.
If there is
anything else I can to help you grow your business, please let me know.
Very Best,
-Greg
Greg Wilson
The REI Mentor
