Long-time real estate agent Sean Gotcher shed light on the matter in his now-viral TikTok video.
Inflated house pricing is a nightmare for anyone looking to buy a place to call home. What happens in these cases is that desperate buyers end up paying huge amounts for the few on the market as sales close within days or even hours. Real estate agent Sean Gotcher, who's been in the business for 11 years, is now criticizing a big corporation for the price jump in a viral TikTok video. While he doesn't specifically name the company many have assumed it to be Zillow, which is a place many people go to looking for real estate listings. Zillow has since faced backlash in the wake of the video where Gotcher explains how a company came up with a convoluted scheme to manipulate housing prices.
Zillow is buying houses in specific areas based on the data they collect from users. They know what people are willing to spend and purposefully drive up the comps in areas that people desire.— Hood Feminist (@Jouelzy) September 17, 2021
“What if there was a company that everybody used, everybody used and everybody knew of to look for houses, and everybody goes on there and searches for houses when they’re bored and stuff,” says Gotcher in the video, as per God.Dailydot. “And so that company, they just sit back and they just collect all the data. They just know what zip code is looking at what zip code and how much those people can afford.” A massive real estate corporation can use the data to start buying up those houses in those areas where people can afford "a certain amount". Most people often sell to companies like Zillow for a lower price because it's a more convenient process when compared to selling to an individual.
wait what????? this whole time the person buying my saved homes on Zillow has been…..Zillow????? https://t.co/rGICDXk5dL— YAN (@ayanalibarra) September 24, 2021
“And let’s say that that company buys 30 homes within a two-mile radius, and let’s say the price is $300,000. So they buy all these homes for $300,000,” continues Gotcher. “And then on the 31st home, they buy it for $340,000. Well, what that just did is create a new comp. So when they go to sell these other 30 homes, that extra $40,000, then you can say ‘this one sold for $340,000,’ just made them $1.2 million off that one neighbor, ’cause they know from their research how much people can afford in that zip code. Weird.” They can also inflate the price of those houses by another $20,000 and “call it a remodel” by changing the carpets and painting the walls.
I've never linked a TikTok in my life but here we go. pic.twitter.com/J7oMvXISkW— 🦹🏾♀️ (@Gladvillain) September 22, 2021
"Zillow" has been trending on Twitter ever since the video broke out. One person shared: My mom's house sold for way over asking price. Found out Zillow bought it. They really are snatching up all the homes for ridiculous prices. The closing attorney said they do a closing every hour for Zillow. Just their office alone. That's wild. Another added: Ban corporate home buying. It’s entirely a scam and hurts millions and millions of families. Zillow should not own all the homes in your neighborhood. The online real estate marketplace responded to the backlash saying that it has come out of circulating “misinformation and falsehoods” about its home buying and selling program that misrepresents its intentions, incentives, and core business model reports VICE.
Zillow faced a rash of criticism this week over its growing presence in the housing market, but the company says the controversy is born out of circulating "misinformation and falsehoods" about its home buying and selling program. https://t.co/reseB3QL2u— VICE (@VICE) September 24, 2021