Wednesday, November 03, 2021

One Unadvertised Scheme - AMONG MANY - For Shaking Down "Middle-Class" Peasants

msn |  In a video that’s garnered more than 2.4 million views on TikTok, Nevada real-estate agent Sean Gotcher criticizes the “iBuying” business model, in which companies buy and sell homes for a profit. In the video, he proposes that a nameless company has a website where many people search for homes “when they’re bored,” and he says that same company “uses that information to go into that ZIP code and start purchasing houses.”

In other words, he’s suggesting that companies such as Zillow are using the data they glean from people’s perusal of home listings on their sites to make decisions about which houses to buy as iBuyers.

Gotcher later argues that the company will buy 30 homes at one price, and then purchase a 31st home at a higher price. “What that just did is create a new comp,” Gotcher says, referring to comparable prices on nearby properties, which appraisers use to determine the value of a home for sale. He then says the company can turn around and sell the other homes at that new, higher price.

In subsequent videos, Gotcher takes on Zillow and Redfin more directly, criticizing their respective business practices.

“I’m happy to see the conversation that’s occurring at every printer in every real estate office about data storage, mixed with buying power and recognizable marketing is finally happening outside our office doors so more can participate in the discussion,” Gotcher, who works for Level Up Real Estate in Henderson, Nev., told MarketWatch in an email.

The video subsequently garnered even more attention on Twitter when a person with the username Gladvillain shared it after learning that the user’s mother had sold her home to Zillow. Many users claimed that Zillow was purchasing “all of the homes,” and said they planned to boycott the platform.

Both Zillow and Redfin contradicted the video’s claims. “The internet has empowered millions of consumers with more information, transparency and tools in real estate to help them make smarter real estate decisions, many provided by Zillow for more than a decade,” a Zillow spokesperson told MarketWatch in an email. “Unfortunately, the internet can also sometimes be a source of misinformation and falsehoods — as is this case.”

A Redfin spokesperson added that the company doesn’t “have the share to manipulate the market nor do we have any desire to, because intentionally overpaying for homes would be a terrible business model.”

Real-estate experts debunked many of the points made in the viral video, and argued that other forces are to blame for the country’s competitive, pricey housing market.

“If you could rig the residential housing market that easily, the Realtors would have done it long ago,” said Gilles Duranton, a real-estate professor at the University of Pennsylvania’s Wharton School.