“You should be able to sell a home within a handful of clicks.”
These are the words of Eric Wu, the CEO of a company called Opendoor, spoken during an interview with the New York Times. On Tuesday, the nation’s paper of record published a report on Silicon Valley’s attempts to hyper-simplify and cash in on the real estate market, analyzing the practices of companies like Opendoor and the much larger and daunting Zillow.
This notion that someone should be able to snap their fingers and sell their home is baked into the core of Big Tech’s approach. The Times claims this practice—of skipping all the hoop-jumping, getting an instant appraisal, and being able to sell your house in three days—is known as iBuying, an objectively inane and wholly unoriginal term meant to 21st-Century-ize the practice. As Wu openly admits in this interview focused on Opendoor’s expansion into Phoenix, the whole idea is to “give homeowners the ability to go online and in a few minutes sell their home.”
While Opendoor focuses solely on the sale and has so far made the bulk of its billion-dollar haul in investments, the Times wrote, Zillow—a popular online database for real estate listings—is playing the long game. As it doesn’t make much money off of the instant-offers program, it went out and acquired Mortgage Lenders of America last year. So now, Zillow doesn’t just sell the homes, but finances the mortgages that accompany them, which means $$$. Naturally, like most every product that slithers out of the valley, Wu and his ilk cake it in language designed to remind users that their goal is to “ensure a delightful customer experience” of “a hassle-free sale,” and make people forget the ramifications of what it means to make a snap decision on ridding oneself of the largest financial asset they have ever owned in their life.
While this trend is assuredly bad (especially in Sunbelt cities) and will worsen if it continues unabated, it’s still in its infancy and thus peanuts in relation to the current damage being dealt out by Wall Street investors. Since the crash, as I wrote back in December, out-of-state finance dickheads have been snapping up half-neighborhoods at a time and jacking the rent up nearly 30 percent, putting local real estate agents out of business and pushing poor people farther away from the remaining areas with consistent work.
Regardless of if it’s a massive corporation, a venture capital-backed startup, or a financier masquerading as a simple online real estate option, the end product is the same: It’s selling a home online to someone with no vested interest in the community save for what they can flip the property for, and that has almost never worked out for anyone except the people at the top of the companies handing financing the mortgages. It is wildly dangerous for local economies—and, to put it simply, dumb as hell.