Because It’s Easy

The rise of iBuyers in the housing market is interesting. Opendoor, Offerpad, Knock, and a handful of other companies promise to make selling a house faster and easier.

Just give them your address and they automatically calculate the value of your home and buy it.

There’s no work to be done.

No cleaning, no repairs, no staging, nobody coming to your house.

Just sign the papers and move.

Sounds great right? But what’s the catch?

From an article on forbes.com:

"So what does this really mean for the homeowner’s bottom line? Most homeowners purchase their home with a mortgage. If you purchased your home for $400,000 with 20% down, you showed up to closing with $80,000 of your own money, which is also your equity. If the value of your home remains the same and an iBuyer offers you $380,000 for your home — a 5% discount to fair value — you will lose $20,000 on the value of your home, plus pay a 5% commission (an additional $19,000). This is a higher transaction cost compared to selling on the open market for $400,000. More importantly, compare that combined $39,000 to your original down payment of $80,000 -- you will be giving up close to 50% of the equity you put into your home partly for the convenience of a quicker sale."

People say they want to get the highest price for their home, but the iBuyers continue to gain market share on the backs of homeowners who are willing to give up 50% of their equity to avoid putting in the work.

Because it’s easy!

Just like people say they want to get healthy, but avoid putting in the work. Instead, they gravitate towards shortcuts.

Take this pill (Lipozene, Hydroxycut, Garcinia Cambogia). .

Buy this gadget (thigh master, ab belt, iron gym). . .

Follow this diet (juice diet, zone diet, carrot diet)

None of that crap works, and we all know it. How many people do you know that lost weight, and kept it off, from a pill? Or that got totally ripped from plugging in their ab belt?

Nobody, of course.

Still, billions of dollars are spent annually as we gobble up shortcuts to weight loss and easy paths to fitness.

Because it’s easy! Meanwhile, nearly 3/4 of us are overweight and somewhere around 1/3 are obese.

It all comes down to the work. There’s always an easy path, the only question is whether or not what you want is really at the end.