November Real Estate News
Between the upcoming holidays and a career that never slows down, you may have missed these headlines. Here's the latest November real estate news.
Busy? Take a sec to catch up on some of the November real estate news you may have missed.
“Will Zillow Offers Revolutionize Real Estate?” is the question and host Nick Sciple discusses it with Luis Sanchez in a recent The Industry Focus podcast.
Early in the interview, in his explanation of Zillow Offers, Sanchez claims that “you can actually get a 100% cash offer from Zillow within 90 days.”
His conclusion is that “Paying 6% to 9% sell your home is definitely a little bit pricier than going through a traditional real estate agent process.”
But he then goes on to add that “A real estate agent might charge you 3%. But the service that you’re getting [from Zillow] as someone who’s selling your home is a quick close and that certainty of that all-cash offer.”
Last I looked, 90 days is NOT a “quick close.”
As of September of this year, Ellie Mae says it takes, on average, 45 days to close on a home.
So, sell your home to Zillow Offers and you’ll not only pay more than you will with a broker, but take twice as long to close.
No wonder the product is bleeding money — $116 million in operating losses in the first half of 2019.
In other November real estate news, over at MarketWatch, agents and consumers go head-to-head in the comments section of a piece about “Why buying and selling a house could soon be as simple as trading stocks.”
The article itself appears well-researched and, while Andrea Riquier is my favorite writer on the site, she definitely ignited a fire with this one.
A few things stood out, for me at least. Here’s a quote from a homeowner who sold her home to Knock.
“having the process rush by so quickly — start to finish in two months”
So quickly? Again, why don’t these consumers know that the current average DOM, nationwide, for broker-assisted sales, is 45 days? What are you guys tweeting, Facebooking and blogging about?
For some reason, this home seller doesn’t know that and thinks that an additional more-than-two weeks to close is “quick.”
If that’s not good blog/social media fodder for agents, I don’t know what is. After all, isn’t “selling quickly” one of the biggest selling points of the iBuyer model?
There’s a myth just begging to be busted in this November real estate news.
One of the “pain points” that iBuyers never claim to solve is the financial one. Notice they never claim to be cheaper than working with an agent.
Riquier outlines Knock’s fee schedule. The company “charges a fee equivalent to 3% of the value of the property the clients have bought and 3% of the cost of the house that gets sold, as well as a small surcharge to cover costs that have been fronted to buying clients, such as initial insurance and escrow payments.”
In other words, Knock charges a 6 percent commission, only they call it a “fee.” Then, there is a surcharge on top of that.
How’s that for November real estate news? It costs consumers more to sell a home with an iBuyer than it does with a broker. As mentioned earlier, the home also appears to take longer to sell.
So, where’s the value these companies offer???
One more comment and then I’ll let you go.
“We think of the strategy of Zillow Offers is not just as a crisper valuation, but kind of an end-to-end experience that can seamlessly integrate the mortgage piece of it, the title, the escrow, and the buying and selling. It’s a big challenge doing all those things at the same time,” claims Krishna Rao, an exec at Zillow.
And yet, real estate agents have been offering this very same “end-to-end” experience – “seamlessly integrating” all of the pieces of the transaction” for eons.
Zillow seems to think this is their idea and that it’s groundbreaking.
Arrogance doesn’t even begin to describe these people.
At any rate, read the comments section of the Market Watch piece (linked to earlier) to get an idea of how both agents and consumers are feeling about the whole iBuyer thing.
“Uncertainty over the U.S.-initiated trade friction with China has led to a cool-down of the U.S. real estate market,” claims Xinhua, the official state-run press agency of the People’s Republic of China.
First, as you know, there is no “cool-down” in the U.S. real estate market. And, if there were signs of a slowdown, most economists here in this country were chalking them up to consumer fears over an impending recession.
Now, there may be some “uncertainty” among foreign investors, such as those from China. They are the ones who have the jitters, not U.S. buyers. In fact, sales to Chinese nationals fell 56 percent over last year, according to the NAR.
And, a lot of that coincides with China’s tightening of currency standards, not a “trade war.”
“A big reason Chinese investors are retreating from the American housing market is that Beijing has placed tight limits on how much capital can leave the country in the wake of a devaluation in the yuan a few years ago,” according to Yan Zhang at USAToday.com.
For the record, Xinhua, home sales increased 5 percent in Milwaukee. In Emeryville, California they’re up 25 percent over this time last year; San Antonio is up 6 percent,
In Miami-Dade, sales are up nearly 7 percent. “In Broward, sales of $1 million-plus homes jumped 39%,” according to the Miami Herald’s Rebecca San Juan.
And we think much of our news is “fake.”
Have a productive November!
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