Does Anybody Remember “Ethics”? Here’s What To Know…
The Internet and technology have brought the ability to access worldwide information, data, statistics, you name it – with the quick tap of a finger. It has changed every aspect of how we live, work, learn, shop, travel, make financial decisions, and more. Technology advances so quickly that if you blink too long, your computer will become obsolete.
The problem is that with all this information overload, as a society we are not paying close enough attention to how the foundations are being structured. We’re too busy trying to keep up! On top of all this, we’re dealing with a worldwide pandemic, an unstable economy, extreme political frustrations, and a mainstream media we can’t trust.
Does anybody remember a little thing called “ethics”? How about “transparency”? It’s important to remember that although knowledge is power, what you do with that knowledge is what differentiates the wolves from the sheep.
Recently in real estate news, Zillow and other iBuyers were accused of manipulating the housing market to their advantage. Although they replied to the accusations with carefully worded protests, the fact of the matter is, these companies are quietly making millions.
Zillow, OpenDoor, Redfin, and other “iBuyers” are actually cash home buyers, and advertise paying a better price than other cash buyers by quite a bit, but still under market value – and for a small convenience fee. Most people don’t realize that – they think of Zillow as a helpful real estate listing and home valuation website. And that’s how they started out.
In 2018, Zillow introduced a buying program called Zillow Offers, and suddenly they’re in the house flipping business. Not only that, but now they have mortgage services for home loans available, too. So why does this matter? Well, since they can buy your house for cash and then sell you another one, the information you get from them could certainly be “manipulated.” However, as long as you stay cognizant of who they really are and what they’re in business for, you can probably still utilize their services, if you choose.
The viral video on TikTok that suggests these companies are conspiring to manipulate is just speculation, and videographer and Las Vegas real estate agent Sean Gotcher freely admits that.
Not only that, his claim that iBuyers are manipulating appraisals with overpriced off-market bids is impossible.
Why? For one reason, off-market sales cannot be used by appraisers in calculating comparable sales information when doing home valuations. There are ways these iBuyers could manipulate the housing market, such as sitting on houses instead of flipping them quickly and restricting housing supply, but so far there isn’t evidence they’re doing that. Everything they’re doing appears to be perfectly legal, but is it ethical? That’s for you to decide.
A Final Noteworthy Thought
So what’s the lesson in all of this? As a consumer and as an investor, staying informed is essential. However, when obtaining your information and data sources, be sure the organization you’re dealing with is purely data-driven and thus unbiased. Do your research so you can make the best financial decisions possible. Let’s not allow this age of “instant information” to make us complacent, but instead, use it to our advantage.