Don’t say The Wistrick Team didn’t warn you!
If you see a “For Sale” sign go up in your neighborhood for one of the many iBuyer brokers, get ready to watch your personal home value take a hit. What’s an iBuyer, you ask? These are the companies advertising instant gratification to sellers with promises like, “Your Home Sold Guaranteed,” “Trade In Your House Today,” and “Instant Offers.” Everyone has seen or heard about these companies, but unless you’re planning to sell, you haven’t had reason to learn about them … until now.
Why would overall home values take a hit?
Here’s a simple case study. Just in Towne Lake Hills East (a nice golf course community in Woodstock) in the last 6 months, 3 homes out of 14 that were sold were dumped to one of these companies. No surprise, these three homes are the LOWEST three sales by a large margin in the neighborhood. How large, you ask? Based on comparable sales, one seller lost $48,000, another lost $36,000 and the last one easily lost $15-20,000. In addition to their losses, they also paid 10.5% “service fees” to these companies (that’s an astounding $37,750 on a $350K home). So in the above instance, one seller lost over $84,000 … and that is a true story.
On average, these homes are sold at least 10-14% below market value … wow!! The sole intent of these iBuyers is to acquire a home well under market value from an uninformed seller and then turn around and flip it for sale still slightly below market value in order to offload quickly. While the investors driving these shenanigans walk away with a HUGE chunk of cash, the neighbors left behind take a big hit in their home values. iBuyers have no interest in preserving neighborhood values; their only objective is to make a profit. If enough people essentially give their homes away to companies like these, we all need to brace ourselves for home values to decline. It’s just a fact—appraisers can’t ignore a sale within your neighborhood that’s not considered distressed. Most who are selling to these companies typically aren’t distressed. They are just looking for convenience that translates into a hefty price tag for everyone else.
So what can be done to protect home values and keep neighbors from dumping their houses with these companies?
Get Social and Vocal. Almost every neighborhood now has a community Facebook page. Make posts about the dangers of people selling to iBuyers and their investors. There’s truly no need to unload a home to one of these companies. The Wistrick Team would be more than happy to provide you with a market analysis report, if you’d like to post for your neighbors on Facebook or via email. That way people in the neighborhood are familiar with values. Let us know if we can help with that!
Don’t be afraid to talk with your neighbors. If your neighbors mention that they filled out an online form from one of these companies to see what kind of “instant offer” they receive, tell them to call us before signing anything. We can give them a realistic value range and save your neighborhood from another low sale.
Attend Association Meetings. Get active and actually attend your HOA meetings. We recommend you standing up and voicing your concerns about people dumping their homes to these investors. After all, the primary purpose of an HOA is to preserve home values.
Share this blog. The more people who understand these impacts, the safer we all are from being hammered on our home values. Post this blog on your social media and neighborhood Facebook page and ask people to share it!! Trust me, even if it’s not happening in your neighborhood yet, it will.
Here’s the bottom line: days on market in Atlanta are still averaging only a few weeks. There is no need for anyone to sell their home for 10-15% under market value and pay 10.5%+ in “service fees” just because they don’t want to bother cleaning out closets, painting some rooms, and vacating for a few weeks’ worth of showings.
Full-service Realtors are key to keeping home values strong. They’re pivotal to pushing the envelope and shooting for higher sales prices for their sellers. Hire wisely in order to make your home (on the buying or selling side) the best investment in your financial portfolio.