Would you go online, fill out some information about your home, accept an offer and move?
A number of Florida residents are doing just that, according to a report in the Orlando Sentinel. They’ve decided to skip the traditional way of selling their home – cleaning, listing with an agent, cleaning some more and holding open houses – in favor of using an online company that buys homes without needing either a mop or a middleman.
These companies, funded by venture capital, are reaching out directly to homeowners, trying to attract them to their websites. They will buy a home, then put it back on the market. The companies aren’t promising to lower the cost of selling a house, but instead, making it easier to do so.
According to the Orlando Sentinel, two companies bought 500-plus homes in Orange County, Florida, in 2018. One of those firms said it plays a role in about 3 percent of all homes sold in the local market and makes the bulk of its money on the 6.2 percent commission it takes in on each home sale.
They do make some profit on home markup, too. The Sentinel reported that one company’s median spread between the amount it paid for a property and the selling price was $11,000. The second online home site said its spread was $19,450. No major upgrades are done after they buy them – usually just painting and some work on the curb appeal.
While real estate often is thought of as a people business, this is a technology business. It analyzes neighborhoods, then reaches out to area homeowners to find interested sellers. Then, when they have bought the house, prospective buyers can use an app to view the house at their convenience since all properties are vacant.
Brick-and-mortar real estate agents, however, are skeptical. One said that these online companies can quote one price, then reduce their offer after inspections. The direct-buy companies also could shortchange sellers who really don’t recognize what their homes are worth.
Your home is your biggest investment, so selling it isn’t a decision to rush into. No matter if you choose a traditional or technology-driven sale, it would be wise to have an experienced real estate attorney look at the contract details, so there are no surprises you might regret.
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