When you want to find some Real Estate listings to look at, where do you go? Zillow! Trulia! Realtor.com! (BTW, NOT owned by the National Association of Realtors or any other Agent group!) Well now they, and other what have come to be known as iBuy investors have decended into the Market and are taking you for a ride! How? It's simple - they make the claim that you can receive an offer from them that easier, quicker, and results in more money to you than the traditional method of selling with Agents will provide. In fact, nothing could be further from the truth!
When you list your home with a competant Realtor, you are taking advantage of a highly regulated, well marketed sales sytem that is by it's Charter dedicated to YOU get the best price in the shortest amount of time with the least hassle! Agents are REQUIRED BY LAW to place their client's interest above all others, including their own! These iBuy companies have no such code - it's THEM against YOU and guess who is going to win? You got it!
Frank and Brian at the National Real Estate Post have initiated a Petition to get some honesty back into the market! I am going to give you the text of their petition and a link to where you can sign it! All I and other Realtors are asking for is a level playing field where the Consumer gets honest information. As of now, the iBuys are NOT being upfront, and we can do something about it!
Here is the Petition Letter:
As you may know, most real estate brokerages, The National Association of Realtors, and all Multiple Listing Systems are currently the target of a class action lawsuit and a DOJ investigation regarding commission fixing. The allegations state that the above referenced entities colluded to keep real estate agent commissions artificially high at 6%.
Ignoring for a moment that real estate commissions have always been negotiable in all 50 US states and that the average commission is closer to 5% than the alleged 6%, I can’t help but notice that both inquiries have neglected to highlight the bad actors within the real estate community who are misleading consumers, manipulating commissions, overcharging sellers, and hurting our communities all across your state. These are the large technology companies like Zillow, Offerpad and Opendoor that sell the idea of fast, easy real estate transactions for lower fees and commissions. If left unchecked, I believe these platforms could very well be the source of our next housing crisis.
I do not use the word “manipulation” lightly. After thorough research, I am still not aware of any real estate “iBuying” platform that charges under 7% in fees. However, because these companies aggressively advertise lower transaction fees than more traditional agents, this amounts to deceptive and predatory tactics in how they sell the value of their services and representative costs. A few facts:
- They routinely charge 7% in fees, if not more. This is more than the average real estate agent or broker.
- In many instances, offers that are made to home sellers on iBuying platforms are accompanied with recently sold homes that suggest the home is worth less than the current market value. I believe this is done to get unsuspecting homeowners to sell their homes below market value.
- Offers from these companies are presented on statements made to resemble a real estate Settlement Statement, which is confusing.
- While the term “commission” is under attack, these companies have created new names for what amount to fees and commissions in a further attempt to confuse or mislead home sellers. Rather than using the term “commission” on an already confusing offer, Open Door is calling it an “experience charge” and Offerpad is calling it a “Seller Credit.”
- Sellers are being charged fees that are, in the industry, generally negotiable.
- Multiple fees are being charged as a means of further fleecing sellers that have never been part of a traditional real estate transaction.
We the undersigned ask you to Investigate Zillow, Offerpad, Opendoor (and other heavily funded tech companies that have recently entered the home buying space) regarding these deceptive and predatory tactics. These companies are expanding quickly and their business models and advertising tactics are becoming increasingly aggressive and misleading. If left unchecked, I fear they will continue to irreparably harm the citizens of your state through decreased home equity, lower taxation.
If you have any further questions or would like further assistance in investigating these large technology companies that are running fast and loose with existing State and Federal Real Estate Regulations, please let me know. Thank you for your time and consideration.
And here is where you can sign the Petition:
Please remember - members of the National Association of Realtors are PLEDGED to consider YOU FIRST! ANY investor is naturally out for themselves ONLY, and these iBuy entities are well-funded and can play the game to your detriment. Check out the facts and call a REALTOR today - you'll be glad that you did!