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> To succeed, it has to price the homes it buys accurately, without seeing them, Which is why this will fail. No way you can get that right. Even in a block of

by retube 10y ago

> To succeed, it has to price the homes it buys accurately, without seeing them, Which is why this will fail. No way you can get that right. Even in a block of identical flats there will be a range of prices: what floor, proximity to lift, aspect and a hundred other little things, not to mention the condition and style of internal fixtures and fittings. Having recently seen a lot of houses, every house is unique. I once viewed two identical flats in a new block on the same floor right next door to each other, both facing the same way. One ended up selling for 30k more than the other. Why? because the view across town was partially blocked for one of the flats by a building across the street.

georgyo 10y ago
I don't think it matters that much. They will offer the lowest their algorithm thinks is correct. And then they send an inspector who where dictates which repairs the seller has to make out of pocket. And if the home is worth more than what they paid and listed the home for, the market tends to adjust. Trying to buy a home in NYC, everything I like is generally bid 10-40% above asking. And since open door already paid the seller, they likely pocket the difference, still collecting their 6-12% on top. With the potential to make 30% on many million dollar homes, they will likely be fine.
- LordHumungous 10y ago
  Problem is no one in NYC or any other profitable market will use them, because no seller is going to accept 10-40% lower price AND a higher fee in a market where it's already easy to sell.
  - georgyo 10y ago
    They already do. People paying all cash saves the seller at least three months. Sometimes the bank won't close for 8 months because of reason and then denies the application forcing the seller to start from the beginning. People do accept all cash bids for less than asking. People know this, and there are tons of places that will pay all cash for your home right now for less. If you live in a place condo or a house, you will get letters asking to buy the house all cash.
    - LordHumungous 10y ago
      K. So why use opendoor and pay an 8% fee when people are sending me cash offers in the mail?
Mindcraft 10y ago
Although I understand your point, the particular example you pick is somewhat easy to fix. Using image recognition it would be fairly straightforward to check if there is a park and what amount of that park could be viewed (maybe using geolocation to check for more images of the park to compare)

by retube 10y ago

georgyo 10y ago

I don't think it matters that much. They will offer the lowest their algorithm thinks is correct. And then they send an inspector who where dictates which repairs the seller has to make out of pocket. And if the home is worth more than what they paid and listed the home for, the market tends to adjust. Trying to buy a home in NYC, everything I like is generally bid 10-40% above asking. And since open door already paid the seller, they likely pocket the difference, still collecting their 6-12% on top. With the potential to make 30% on many million dollar homes, they will likely be fine.

LordHumungous 10y ago
Problem is no one in NYC or any other profitable market will use them, because no seller is going to accept 10-40% lower price AND a higher fee in a market where it's already easy to sell.
- georgyo 10y ago
  They already do. People paying all cash saves the seller at least three months. Sometimes the bank won't close for 8 months because of reason and then denies the application forcing the seller to start from the beginning. People do accept all cash bids for less than asking. People know this, and there are tons of places that will pay all cash for your home right now for less. If you live in a place condo or a house, you will get letters asking to buy the house all cash.
  - LordHumungous 10y ago
    K. So why use opendoor and pay an 8% fee when people are sending me cash offers in the mail?

Mindcraft 10y ago

Although I understand your point, the particular example you pick is somewhat easy to fix. Using image recognition it would be fairly straightforward to check if there is a park and what amount of that park could be viewed (maybe using geolocation to check for more images of the park to compare)