According to Linda O’Koniewski, CEO, Leading Edge, “The big real estate news this week is that Zillow has stopped its “Instant Offers” program. Zillow will no longer buy homes directly from sellers and re-sell properties on the open market. Zillow ceased this venture because they were losing hundreds of millions of dollars; they sold many homes for less than they paid. You can’t buy high and sell low.
“What are the key takeaways for every consumer? Well, Zillow hasn’t figured out pricing yet. More importantly, they learned what smart and hard-working real estate agents had known all along. If someone wants to buy a property directly from a seller, it has to be purchased far below fair-market value to turn a profit when “flipping” or re-selling the property. That is why we counsel every homeowner to be wary of selling directly to any outfit that promises fair market value when they intend to re-sell your home on the open market. Sellers love convenience, but there is a high price to pay. The discount to homeowners is usually 30% plus. Very few sellers would sell directly to a flipper if they truly knew how much money they were losing.”
October sales of single-family homes in the Leading Edge service area decreased -27.1% year-over-year. Inventory decreased -35.9%. The number of days on market over the last 12 months decreased -28.6% while median sale prices remain up +12.1% at $750,000.