I thought we would switch up the style a little bit this week and answer some questions that have been submitted to us over the last few weeks.
Q: I am curious as to what percentage of residential real estate sales in Deschutes County are cash buyers (no financing/mortgage needed)? Also, has this percentage changed over the last few years? -Jim G
A: Thanks for reaching out, Jim, thanks to our friends over at Central Oregon Association of Realtors® we were able to get that information for you! To simply answer your question, in the first quarter of this year 25% of single family residences were purchased in cash. In quarter two we saw this number grow slightly to 27% of buyers of SFR were cash. The one thing I would like to point out is that in quarter 1 of this year, rates were quite low, and they really started creeping up as quarter two was closing out. So, I may need to update this once we have more data from quarter three and four of this year (update coming).
Q: What are ibuyers in Real Estate? How does it work? – Sarah H.
A: Appreciate you reaching out with the question, Sarah! Basically, ibuyers use technology to evaluate and analyze real estate markets and with large amounts of capital they can make offers on homes and can close quickly. Often, they then do light rehab work on the home and relist the property for sale in hopes of making a profit. The benefit for the seller is a "simple," "smooth" transaction with less stress as their buying process is streamlined. That is a simplistic summary of a complex business plan. Results have varied, to say the least. Earlier this week the Federal Trade Commission fined Opendoor $62 million for deceptive practices. The FTC found that Opendoor told customers that they would make more money selling to them versus the traditional way of listing and selling a home with an agent, when in fact the FTC found most of the time sellers made less money than those who used a real estate agent. Opendoor bought just shy of 37,000 homes last year, while one of their largest competitors, Zillow, shuttered their ibuyer program last year after losing close to half a billion dollars in quarter 3 of 2021. This is my opportunity as a real estate professional and "competitor" of these groups to point out that these ibuyers aren't in the business of paying top dollar, in the same way someone looking to "flip" a home is also not paying top dollar. The reality is they need to have their own profit built into the deal, and this is accomplished by purchasing your home for below market value.
Q: Which neighborhood is the best in Bend? – Renee U.
A: It depends. Honestly, everyone is going to have a different answer, much like asking about favorite a brewery in town. It's hard to narrow the list and of course, opinions will vary. Some people want large lots out of town; other people want to walk to their favorite restaurants and coffee shops. Still others just simply want a place to call their own. I suggest taking a few walks or bike rides through neighborhoods at various times to get a feel for how they really are. Hope you find what you are looking for!