Update: On the New Rules of Home buying and Home Selling
You can imagine I was both thrilled and honored to be contacted by Bankrate on my original article (Cash for Homes) below. Bankrate is a trusted source of financial and mortgage information, an essential part of home buying. With the suspension of open houses, showings, and face-to-face document signing, Bankrate's team has come up with a guide on "How to buy or sell a home during the pandemic." It has tips on how to utilize digital tools to reduce in-person interactions, and ways to minimize delays in the process.
Real estate is an essential business
As of this update (April 14, 2020) we are almost one month in to our state of California's stay-at-home order given on March 19. Less than 10 days later, California Association of Realtors® announced the Department of Homeland Security chose to include all commercial and residential services as part of the “Essential Critical Infrastructure Workforce." For those of us in the real estate industry it was a relief to be recognized as "essential." We know our places of business and our homes are the foundation of our lives. Here in the Inland Empire we are doing our best to continue working to serve the public in the best way possible. We recognize and put in practice social distancing, while at the same time, assisting home buyers and home sellers buy and sell homes. It can be done and is currently being done.
I know my team at Coldwell Banker Blackstone Realty is continually thinking of new, creative ways to avoid in-person meetings while closing real estate transactions. Contact me today for more information on how we can assist you in buying your next home.
Cash for Homes
The ibuying programs are the old-fashioned, luddite "we buy homes for cash." The largest difference between the two is the ibuying program is done via the internet. Started in 2014 Opendoor set out to gain market share from traditional, resale home brokerages by using computer technology. Since then others have gotten on the bandwagon, Zillow and Redfin, as well as other brand-name, traditional brokerages, such as Keller Williams.
The concept of ibuying appeals to home sellers who want convenience. The hassles and expense of staging, showing and making repairs are set aside for a quick, all-cash sale. As with anything that is quick and easy, there are strings attached. After inspection, an all-cash buyer may decide not to honor the agreed upon price and offer the home seller less. Rather than paying a "commission," the home seller will be charged various fees that are non-negotiable as cost of the sale. These fees can add up quickly and impact a home seller's net proceeds. For some home sellers, though, ibuying may be the perfect solution for their needs.
see "What sellers need to know about ibuying platforms," Bankrate, October 24, 2019
Pausing Temporarily and Indefinitely
Zillow is shutting down their ibuying platform only in California to comply with the governor's "shelter in place" order. Nationwide Zillow's ibuying continues to be available to home sellers.
Opendoor suspended their ibuying program nationwide based on recommendations from the CDC stating their main priority is the "safety and well-being of their customers, employees and the general public."
Redfin also followed and put a stop to their agents from showing open houses to prevent the spread of the Coronavirus, as well as suspend their instant offers program. Redfin CEO Glenn Kelman is quoted as saying, "We expect to be making instant offers again soon, but only when the market becomes more predictable."
see, "Opendoor, Zillow begin pausing homebuying, citing coronavirus concerns," Housing Wire, March 20, 2020.
Time will tell if the Coronavirus crisis will cause the housing market to decline, especially in California. I will be watching the numbers in the coming months to see which way home prices are headed in the Inland Empire.
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