Once upon a time in my young career, I used to think about sending little notes to flailing sellers, telling them why their houses weren’t selling. Arguably, this would have been a violation of Article 15 of the NAR Code of (ahem) Ethics, but it would have been bad form regardless. Besides, I was making good money by picking off those mis-marketed listings for my buyers.
The terrible marketing errors of the REO listers is how we survived the downturn. I built software to predict how much I could underbid them and still snag the house. I wrote last Summer about how to apply those ideas to underbidding the iBuyers – who all seem to come from the REO world and who mis-market accordingly.
I confess: My current listing praxis is more than just a little informed by studying all the bonehead marketing mistakes I’ve seen over the years.
So for Daniel Morillo, newly hired by OpenDoor to convince Wall Street they’re not a joke, using just one listing, I will show you why OpenDoor’s houses sell slower and lower than they should – even in a market as hot as Suburban Phoenix at Peak 2020.
The first extracurricular research project I did for Zillow, when I was working as a pricing algorithm, concerned closing-cost concessions in their sales. They didn’t know what questions to ask, so I kept giving them incredibly-detailed technically-correct wrong answers.
What they actually wanted to know was this: “Why do so many of our transactions entail concessions?”
The answer? Because they’re mis-marketed. This is true of all listings: Discounted offers denote blood in the water. Since 2014 at the latest, in Metro Phoenix a properly-marketed bread-and-butter home should sell above, at or near fair-market-value in under 15 days, ideally under 5, to an all-cash or well-qualified conventional buyer. If you’re taking offers with closing cost concessions, you did something terribly wrong.
As it happens, the last research project I did for them, in June 2019, involved a much more direct question: “Why are a third of our listings over 90 Days-on-Market?”
The answer? They and all the other iBuyers were and are getting a Read more
I live a charmed life, just now, and I know it. The resale market in the Valley of the Ever-Fecund Sun has been all my way for seven-ish years, culminating in our current simmering state of frenzy.