A 16,000-square-foot distribution center is under construction in Farmers Branch, statewide employment is on the rise, the W.T. Waggoner Building will be converted into a hotel, and squatters are taking over iBuyer self-tours, all in this week’s roundup of real estate news.

A 16,000-square-foot distribution center is under construction in Farmers Branch, statewide employment is on the rise, the W.T. Waggoner Building will be converted into a hotel, and squatters are taking over iBuyer self-tours, all in this week’s roundup of real estate news.

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opendoor

Courtesy Opendoor

Opendoor has made no secret that it wants to dominate the entire real estate industry. In fact, just last month founder Eric Wu told Inc. that he believes the five-year-old company will “build the largest marketplace of homes.”

And while the company is on pace to purchase $5 billion in homes this year, other companies are joining the fray — even the more “traditional” brokerages like Keller Williams offer it in select cities (including Dallas), and even locally, JP & Associates announced the launch of an iBuyer program for its agents this year.

The iBuyer may represent barely a percentage of the overall real estate ecosystem currently, but it’s clear that it’s disruptive enough to spur even bigger outfits like Realogy’s Coldwell Banker into getting their feet wet. 

But Wu told Inc. he had a plan, and it seems that as of 8 a.m. this morning, the rest of the world knows part of it — a new, all-in-one buyer service, which enables prospective buyers in DFW to browse, tour, and buy any MLS-listed home on the market through Opendoor. 

“If we can vertically integrate the category, rebuild every component from the ground up, automate a lot of the steps, and make it one click to buy, sell, or trade,” he told Kevin J. Ryan, “we believe that we will build the largest marketplace of homes. We’ll have eliminated all the friction. That may take 10, 20, 30 years.” (more…)

 

There is a lot of talk to sort through when it comes to “disruptors” in the real estate industry, including the focus on technology and alternative listing models, such as flat-fee listings and or iBuyer sales.

But that’s not where the real disruption is happening — those are just strategies, says Andy Bearden, founder of the Insight Realty Network. The real disruption the industry faces is the seismic shift in the relationship between brokers and producers.

Andy Bearden

Experienced agents are becoming more demanding of value and will not tolerate a broker that cannot deliver simple things like a returned phone call or timely payments. They want brokers who are business partners and are committed to helping them build a solid business. A broker that will help them build wealth so their family can thrive and they can give back to their community.

“I find it funny that some brokerages teach that the key to wealth building for agents is to help the brokerage to recruit,” Bearden said. “The key to wealth building is to get your personal finances in order, run your business like a business, and invest in real estate.”   

Insight helps on all three fronts with the tools, education, and encouragement people need to finally earn what they are worth.  “And we return every call by the end of the day,” said Bearden.

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By Matthew Templeton
Managing Principal
KW Urban Dallas

Why is there so much movement in the iBuyer world?

First: What is an iBuyer?

An iBuyer is an institutional or business-based investor that uses automated valuation models (using data and algorithms to estimate value and trends over time) to make offers on properties in the market without actually having to have a huge workforce on the ground.

Who are these guys? Opendoor may be the one you’ve heard about the most. But also, Knock (a version of iBuying that gives you cash to buy the home you want before helping you sell yours), Offerpad, Coldwell Banker, Zillow Instant Offers (opened in Dallas on April 15), and coming in May to Texas, Keller Williams, according to Inman News this week.

How is this different than a traditional investor? In some ways, it’s not — individuals with bandit signs that say things like “we buy houses for cash” and companies like HomeVestors (“We Buy Ugly Houses”) with billboards have been models for decades.  

What’s different is that these institutional investors can buy properties at scale and their hope is to make money on the volume acquisition.  They claim to be purchasing at higher prices than a traditional investor (seemingly providing convenience for a slightly lesser price than retail).  The marketing pitch is slick. The idea behind it seems amazing — except that homes are not just data points. The fallout is yet to be determined.

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North Texas-based JP&Associates is entering the iBuyer market on behalf of its agents, launching an instant offer platform across the exploding firm’s brokerage and franchise network this week. 

This makes JPAR, a full-service brokerage with a capped transaction fee, the first independent brokerage in North Texas to launch an exclusive iBuyer program for its agents. It’s called JPAR Instant Offers.

“Entering the iBuyer market gives our agents a competitive advantage over Opendoor, Knock, OfferPad, and the other unilateral “sell now” offers,” says Giuseppe J.P. Piccinini, President and Chairman of the Board of JP & Associates Realtors. “This will greatly benefit our clients and agents.”

J.P. says he has partnered with a Seattle-based company, OfferAI. which relocated to Dallas in January.

“OfferAI is a white-label iBuyer that uses a bot to make instant offers on off-market properties. It empowers agents to present themselves as an iBuyer from their brokerage site, or their own affiliate page of OfferAI,” says Jack Burns, Founder and CEO of OfferAI. 

Unlike most of the current iBuyers on the landscape, JPAR associates become the “chaperones” of the webpage so they can guide sellers through the process and they retain a 3 percent commission on accepted instant offers.

“And that’s a game-changer,” says JP.

Burns relocated to Dallas from Seattle earlier this year with his firm. He says Texas is a preferable market for the rapidly growing iBuyer market, more so than Seattle, because of our relatively affordable home prices.

“The iBuyer space has not made a strong presence in the Seattle market because the median sales price is $669,500, way too high for iBuyers,” says Burns.
 
Seattle is home to Zillow, Amazon, Microsoft, and other high tech companies, but not likely to be an iBuyer hub.
 
“Texas is a sweet spot as far as home prices that work well for iBuyers,” says Burns, “That’s a home usually in the $200,000- to $250,000-ish range.”

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home buyingWho is most likely to have home buying as a goal this year? Will remodeling and home improvement spending continue to grow?  We look at this and more in this week’s roundup of real estate news.

Four Percent List Home Buying a 2019 Goal

Four percent (about 10 million Americans) said buying a new home was their main financial goal for the year — and millennials were the most likely generation to claim that as a goal, a new Bankrate survey revealed.

Seven percent of millennials said they wanted to buy a home this year.

But that doesn’t mean financial goals aren’t being set. Bankrate’s survey revealed that about 89 percent of Americans have at least one goal for the year, with paying down debt being at the top of the list, with three in 10 saying that was their goal, followed by better budgeting (13 percent), saving more towards retirement (12 percent), saving more for emergencies (10 percent), getting a higher-paying job (6 percent), and investing more (5 percent). (more…)