Answer
Mar 13, 2021 - 07:02 PM
iBuying can only become mainstream if the companies involved are making money. According to highly regarded real estate strategist Mike Delprete, both Zillow and OpenDoor are losing about $40,000 per home when all costs are factored in.
They claim to be making money on a unit economics basis not counting salaries, technology and all the other costs involved in buying and selling homes. To use his term, it is like each home is magically bought and sold on an "immaculate conception" basis.
We've seen this game play out many times before. Companies attempting to "disrupt" real estate with technology and pursue a "lite model" that does not involve high touch engagement from a real estate agent. It never ends well and this time will be no different.
Houses are non-standard, markets are highly fragmented and defy any attempt at this kind of play.
They claim to be making money on a unit economics basis not counting salaries, technology and all the other costs involved in buying and selling homes. To use his term, it is like each home is magically bought and sold on an "immaculate conception" basis.
We've seen this game play out many times before. Companies attempting to "disrupt" real estate with technology and pursue a "lite model" that does not involve high touch engagement from a real estate agent. It never ends well and this time will be no different.
Houses are non-standard, markets are highly fragmented and defy any attempt at this kind of play.
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