Realtors Face Federal Scrutiny of Broker Commissions Justice Department probe

[sleepy5136]

I don't understand the "inflating the market" part. They are buying and immediately relisting. They're not actually taking inventory out of the market. On average they sell for around the same price as they buy.

I think they will probably move into escrow and mortgage services soon and try to capture some of that market.

According to the video, they are buying and reselling for more than they bought it for. If that inflated price gets sold, that becomes the new comp in the area. And if they keep on doing it, all the new comps will be inflated. And while doing so, they are collecting all the data and storing it in their databases which can be information that they can sell to third party to generate A LOT of revenue.

Being in the data engineering field, data providers make a ton of revenue. Especially when the data is clean and well formatted which Zillow/Redfin have the engineering power to do so.

But in reality they sell for slightly less than they paid, on average

The video says otherwise. So I can't comment on that.

 

[usctrojancpa]

I've actually seen over a dozen of these ibuyer offers for some of my clients homes and I did one for my home for the hell of it.  I can tell you that their prices are on the low side and then their fees are 6-8% plus repairs costs so the owner is getting shortchanged so I call BS on this video.  They are in it to make the fees on the home but in this market they also get the home bid up because the market is so strong so they get appreciation as well.  These ibuyers will never fully corner the market because the market is so fragmented and they'd never have enough capital to own more than 5%-10% of the available homes available for sale.  I offer a similar service to my clients where I'll buy their exit property or their move-up property for them but with a lot more flexibility than these ibuyer companies.