In this episode of the OfferMarket Podcast, Daniel discusses turnkey rental properties and walks you through a recent deal. Subscribe and enjoy!

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Episode 3: Turnkey Rentals Brain Drain | OfferMarket

OfferMarket Podcast, Episode 3: Turnkey Rental Properties Brain Drain 

Small houses are not necessarily hard to sell, though it depends on a few factors:

 

## Is it priced to sell?

 

The #1 home selling mistake we see is when a home is not priced appropriately. Listing too high will result in many would-be-buyers not even inquiring. Many will wait for possible price drops or keep looking at other options. What's more, many buyers have firm maximum price limits and won't even consider or be altered to your listing. 

 

To sell your house fast, you need to price it at an attractive point to draw in as many buyers as possible. This means carefully analyzing [comps](https://www.offermarket.us/real-estate-glossary/comps).

 

## How small are we talking?

 

In your local there are likely many people looking for houses for sale with 1 to 2 bedrooms and 1 bathroom. But if we're talking about a tiny house (100 to 400 square feet), then the market of prospective home buyers is probably also tiny.

 

### How unique is the house?

 

If your house is designed in a manner that very few people find appealing, then you would need to reduce your asking price in order to sell in a timely manner.

Are small houses hard to sell? Not necessarily, it depends on a few factors. There's more to learn at OfferMarket. 

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Are small houses hard to sell? - OfferMarket

Are small houses hard to sell?

## Zillow Offers competitors include:

 

- Opendoor
- Offerpad
- RedfinNow
- OfferMarket

 

| Service | Type | Offer Competitiveness |
|:-------------:|:---------------------------------------:|:---------------------:|
| Zillow Offers | iBuyer | Low |
| Opendoor | iBuyer | Low |
| Offerpad | iBuyer | Low |
| RedfinNow | iBuyer | Low |
| OfferMarket | Marketplace | High |

 

## What is Zillow Offers?

 

​Zillow Offers is an "iBuyer" (short for "instant buyer") of single family homes. [iBuying](https://www.offermarket.us/real-estate-glossary/ibuying) is a new home sales model where you receive a cash offer to sell your home fast. While there is an incredible convenience factor in play, the iBuying model comes with some drawbacks that we feel are important to know. If you're looking to sell your home fast and looking for Zillow Offers competitors, this article aims to detail your options.

 

## Things to know about the iBuyer model

 

- Service is available in limited markets
- Not all houses receive an offer
- You will receive a lower offer than you would in a competitive sale
- You will pay service fees of 6% - 10% (not including repairs)
​
 

## How does Zillow Offers work?

 

1. Check to see if Zillow Offers is available in your area and if your house is eligible to receive an offer.
2. Submit your application
3. Review your estimated Zillow Offers sale price ("market value")
4. Schedule your home evaluation during which repair costs will be estimated and deducted from your market value estimated sales price
5. Review your final offer, if you accept you choose a closing date
​
 

## How does Zillow Offers determine their offer price?

 

Zillow Offers uses a combination of comparable analysis, home-specific information, local broker feedback and machine learning in order to prepare their offer. Your official offer will factor in your in-home evaluation visit to adjust for required repairs.

 

## Where is Zillow Offers available?

 

Zillow Offers is currently available in select cities across 12 states including Arizona, California, Colorado, Florida, Georgia, Minnesota, Nevada, North Carolina, Ohio, Oregon, Tennessee, Texas. 

Arizona 
​Phoenix, AZ 
Tucson, AZ 

 

California 
Los Angeles, CA 
Riverside, CA 
Sacramento, CA 
San Diego, CA 

 

Colorado 
Colorado Springs, CO 
Denver, CO 
Fort Collins, CO 

 

Florida 
Jacksonville, FL 
Orlando, FL 
Miami, FL 
Tampa, FL 

 

Georgia 
Atlanta, GA 

 

Minnesota 
Minneapolis-St. Paul, MN 

 

Nevada 
Las Vegas, NV 

 

North Carolina 
Charlotte, NC 
Raleigh, NC 

 

Ohio 
Cincinnati, OH 

 

Oregon 
Portland, OR 

 

Tennessee 
Nashville, TN 

 

Texas 
Austin, TX 
Dallas-Fort Worth, TX 
Houston, TX 
San Antonio, TX 

 

## Zillow Offers vs OfferMarket

 

| Comparison | OfferMarket | Zillow Offers |
|:-----------------:|:---------------------------------------:|:---------------------------:|
| Service fee | 0% | 8.5% |
| Repairs | $0 (as is) | deducted from initial offer |
| House type | Any | Selective |
| Closing timeframe | 15 - 45 days | 7 - 90 days |
| Markets | Nationwide | Limited cities in 12 states |

 

## How much does Zillow Offers cost?

 

| Comparison | OfferMarket | Zillow Offers |
|:--------------:|:-----------:|:-------------:|
| Purchase price | $100,000 | $100,000 |
| Service fee | $0 | $8,500 |
| Repairs | $0 | $0 |
| Closing cots | $1,500* | $1,500* |
| Net proceeds | $98,500 | $90,000 |

 

## [Sell your house fast and competitively with OfferMarket](https://www.offermarket.us/sell?ref=blog-zillow-offers-competitors)

 

## Related comparisons:

 

- [Offerpad Competitors](https://www.offermarket.us/blog/offerpad-competitors)
- [Opendoor Competitors](https://www.offermarket.us/blog/opendoor-competitors)
- [RedfinNow Competitors](https://www.offermarket.us/blog/redfinnow-competitors)

Learn about Zillow Offers competitors and how the iBuying service compares to Opendoor, RedfinNow, Offerpad and OfferMarket.

Zillow Offers Competitors - Opendoor - RedfinNow - OfferMarket

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Zillow Offers Competitors - Real Estate Blogs - OfferMarket

Zillow Offers Competitors

Grow your real estate investing business with the most competitive DSCR loan product. OfferMarket provides DSCR rental loans, bridge loans, hard money, fix and flip, slow flip, and ground up construction loans.

Private Lending | OfferMarket

Private Lending

Current high-interest rates will only keep going up

What does it mean for home sellers?

Higher on-market inventory

What does it mean for home buyers?

What does it mean for real estate investors?

What is the best game plan for someone who wants to grow their real estate portfolio?

Sum it all up

In recent years, the USA economy has been on a roller coaster ride up and down with the volatile interest rate. Some people are wondering if we will ever be able to break free from this trend and how long it will take. While there is no definite answer regarding when this will happen, it's not too late to start preparing for the future. 

 

## Current high-interest rates will only keep going up


 

The first truth is that interest rates will only continue to increase in the next few (6-10) months. The Federal Open Market Committee (FOMC) has already raised interest rates from [0.75% to an annual rate of 1.5%](https://www.weforum.org/agenda/2022/06/rates-inflation-federal-reserve-united-states) this year, and they are expected to increase them again. High-interest rates will not bring economic growth back to the United States. It's important to remember that low-interest rates were not the cause of the Great Recession - both Covid-19 and war were. Raising interest rates will make it harder for businesses and consumers to afford debts, worsening growth prospects. 

 

## What does it mean for home sellers?

 

If you're considering selling your home in the next few months, you may want to prepare yourself for high-interest rates. According to experts, the current high-interest rate environment will only keep going up. The higher the interest rate, the fewer people will want to buy your home. High interest means that sellers are putting a hefty price on homes. The market is hot, and competition for the property is low; thus, sellers will demand a higher price for their homes.

 

## Higher on-market inventory

 

Higher interest rates are one of the realities of the current high-interest-rate environment. Higher rates can impact people’s ability to borrow money, leading to increased borrowing costs and decreased profits. In addition, if a company has high levels of debt and outstanding liabilities, a higher interest rate can increase its financial risk. When the inventory level rises, it will impact the ability of buyers to find their dream home. Because sellers are still listing their homes at a high price point, they may not be able to sell because the demand is low or there is little activity on the market.

 

### Fewer buyers


 

The high-interest rate environment is causing fewer buyers to enter the market, resulting in less demand for homes. As a result, it has resulted in higher prices for homes, especially in areas where prices have been stagnant for an extended period.

 

### Lower prices if they want to sell

 

Interest rates usually indicate a mortgage rate, but they can also be applied to interest charges charged to borrowers.
The higher the interest rate, the lower the home resale price. It is often estimated that about [12% of the home sales](https://www.cnbc.com/2022/04/07/rising-mortgage-rates-cause-more-home-sellers-to-lower-asking-prices.html) had a price drop in 2021.


 

## What does it mean for home buyers?

 

When people refer to the current interest rate environment, they usually talk about the ultra-high interest rates we have seen over the past few years.
It is often more difficult for homebuyers to qualify for a loan in a high-interest rate environment. It is because a higher interest rate requires a higher down payment, which can be difficult for borrowers who don’t have a large home equity cushion. High-interest rates can also lead to longer loan terms, making it more expensive to borrow money over the long term.

 

### Interest payments on mortgages are way higher

 

Interest payments on mortgages are way higher than they've ever been before. It is mainly due to the high-interest rate environment that we're currently in.
Higher interest rates mean that borrowers have to pay a lot more in interest payments on their mortgages. This increase in mortgage payments has a ripple effect throughout the economy, as it can lead to higher consumer prices and reduced spending.

 

### Maybe lower prices on homes

 

One of the hard truths about the current high-interest rate environment is that prices on homes may be lower than what you would expect in a more normal market. Many people are selling homes now rather than holding them, assuming prices will likely drop more if they wait too long.

 

### Better selection of properties

 

When looking for a property to purchase, it is always important to consider your specific needs and wants. In today's high-interest rate environment, ensuring you select the right property is even more essential. And you may get the opportunity to better selection of properties. When purchasing a home, there are many factors to consider, and an excellent real estate agent can help you make the best choices for your needs.

 

## What does it mean for real estate investors?

 

The high-interest rate environment is causing some difficulty for real estate investors. Here are three hard truths about the situation:

 

### More inventory

 

On the surface, it may seem more inventory is available than ever. However, many homeowners cannot sell their homes due to the high-interest rate. This has resulted in many homes remaining on the market for an extended period.

 

### Softer prices

 

High-interest rates can cause softer prices. There is a correlation between mortgage rates and home prices. As a result, a rise in mortgage rates causes a drop in home prices as people hold off on selling their homes.

 

### Hard to find cheap financing

 

It can be hard to find affordable financing options when you're looking to invest in real estate in a high-interest environment. Unfortunately, the high-interest rate environment has made borrowing expensive for many people. Overall, the high-interest rate environment is challenging for both individuals and businesses. However, staying calm and taking things one step at a time is essential.

 

## What is the best game plan for someone who wants to grow their real estate portfolio?

 

The high-interest rate environment has made it difficult for many people to grow their real estate portfolios. Here are how to play the game best:

 

### Look for deal

 

It is essential to have a strategy for investing in real estate. Many people try to jump into the market without a plan, making mistakes. Knowing what you are looking for in a property and budget is vital. Once you have this knowledge, you can look for properties that match your criteria.

 

### Make lots of offers

 

The high-interest rate environment is tough on borrowers. You need to understand the risks of taking on high-rate debt. To thrive in a high-interest rate environment, you must make lots of real estate investments.

 

### Try floating debt with a plan to refinance

 

The high-interest rate environment has a significant impact on many people's lives. Some are struggling to keep up with the payments on their high-interest rate debt, while others are considering floating debt or interest-only debt in hopes of refinancing once rates come down in years or never if the property is cash flowing.

 

### Try interst-only (IO) debt with a plan to refinance

 

In high interest rate environment investors resort to more exotic options that maximizes cash flow. Interest-only debt is another term for a balloon payoff. Each month you only pay the interest portion and at maturity, 30 years into the future for example, all of the principal is due at one time. The advantage of this approach lies in smaller monthly payments, allowing landlord to have a higher cashflow spread between rents and debt service. Borrower often refinance into other types of loans well before maturity of this loan, avoiding the balloon payment and earning an ultra low monthly debt service payment. 

 

## Sum it all up

 

It's no secret that the high-interest rate environment has had a negative impact on many people's lives. This article is intended to provide hard truths about this environment and help you understand just how serious it is for your specific situation. Then, armed with that knowledge, you can make informed decisions about how to protect yourself and your financial future best.

High interest rate environment is quickly become the new normal for the lending industry, adaptation is mandatory for survival. 

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Hard truths about the high interest rate environment

Current high-interest rates will only keep going up

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