Is 12% worth avoiding a Realtor?

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Real Estate Agent with Long Realty West Valley AZ RE Lic. #SA560004000
https://activerain.com/droplet/5fN7

  

Over the past year companies like Open Door and OfferPad have made some inroads into the Phoenix real estate market. Small inroads (about 3% of total sales valley wide over the past year), but inroads nonetheless.

For those not familiar with Open Door and OfferPad, they are companies that promise to buy your home for "market price" and close within days, alleviating the stress and hassle of selling your home.  In turn, they then make any repairs/updates necessary and then list the home for sale themselves.

But here's the catch, the "fee" they charge to purchase your home ranges anywhere from 6-12% of the purchase price.  PLUS, they reserve the right to charge a "repair" fee.

I did an informal analysis of homes that Open Door and Offer Pad have purchased and sold in my market, Anthem, AZ, over the past year.  And our broker did a similar analysis of the retirement communities we serve around the office.  We both came to the same conclusion.  Open Door and Offer Pad typically pay a seller 12% LESS than the going market rate for their homes. And when you think about it, of course, they have to, in order to earn a profit on THEIR sale.

So the question I've been asking is, why would anyone forgo potentially 12% of their purchase price (approximately $34,000 in the Phoenix area based on the current median home value) to avoid using a Realtor?  PLUS pay a brokerage fee on top of that.  I can understand if a seller is in a dire situation and needs to sell immediately, but other than that, it's a lot of money to be leaving on the table.

 

Contact me at 602-334-3757 or e-mail: jwmurphy@longrealty.com for information about the Phoenix/Scottsdale real estate market.

 

 

 

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Rainmaker
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William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

These companies are rip-offs.  They prey on the unfortunate and rip them off.

Oct 20, 2018 03:33 PM #1
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Anna Banana Kruchten CRB, GRI, WLS
Phoenix Property Shoppe - Phoenix, AZ
603-380-4886

Jerry Murphy, CRS, SRES I'm with you on this one. I can see the rare situation where somebody would leave money on the table just to get out of it fast. Plus this type of broker does not represent the sellers. They represent their brokerage and the brokerages best interests. Nobody is  looking after the sellers best interest. Now who does that make sense too!!  All these years we've stressed AGENCY representaion.  It appears the game is changing yet again - and will continue to move in this direction.

Nov 03, 2018 12:45 PM #2
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Rainmaker
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Jerry Murphy, CRS, SRES

Anthem, Phoenix, and Scottsdale AZ Real Estate
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