THE OFF-MARKET HOUSING MARKET
“There is a huge interest in people wanting to be landlords, wanting to buy investment properties,” he said, explaining that these investors are hungry for inventory to buy. “And that’s what we’re good at. Generating the leads of people who want to sell that ugly house that needs repair.” The off-market footprint of HomeVestors may be also expanding simply because a greater share of the homes their franchisees buy are subsequently re-sold to other investors — typically via another off-MLS
from 941 deals totaling $88 million in 2013, according to its website.
transaction — rather than to an owner- occupant sold through a Realtor and listed on the MLS. “We are selling more properties to other investors now than we were,” Hicks said. “We were selling more than half to end-users a few years ago, and now we are selling more than half to other investors.” NetWorth Realty is another direct buyer that has been around for several years and is continuing to grow, with 1,726 deals totaling $234 million in 2016, up
The basic NetWorth model is built on helping prospective real estate investors find properties to purchase as rentals or fix-and-flip opportunities, according to president Mark Bloom, who helped launch the company in 2008. “We’ll find properties. Our properties are off-market, they are not on the MLS,” he said, adding that the properties are also kept off-market when re-sold to investor clients in an effort to provide those clients with fixed pricing outside of a competitive bidding environment. “We fix our pricing. We keep all of our inventory off market.” Dollars Attracting Disrupters What is attracting the new wave of potential MLS-disrupters such as REX, Opendoor and Offerpad and fueling the growth of more old-school direct buyers such as HomeVestors and Networth Realty? The short answer is dollars. Real estate is a huge business and there is no fundamental reason why it should not change. Indeed, its very size invites new thinking and approaches: Existing home sales for the year are expected to total roughly 5.5 million units. As of June the median sale price was $258,300. That’s a total of $1.4 trillion in 2017, transactions which will generate commissions worth tens of billions of dollars — a number that goes up with new home sales, mortgage originations, title work, and insurance.
“Our properties are off-market, they are not on the MLS. … We fix our pricing. We keep all of our inventory off market.”
MARK BLOOM PRESIDENT, NETWORTH REALTY, DALLAS, TEXAS
OCTOBER 2017 | ATTOM DATA SOLUTIONS
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