'Price-Distorting' iBuyers Like Zillow Hurt U.S. Homeowners, Rivals Say
&gt;“These are price-distorting entities,” Vishal Garg, the founder and CEO of Better.com, a digital homeownership company, told Motherboard. “They harm our customers.”<p>I skimmed the rest of the article and I&#x27;m not sure how it distorts price. The only thing that&#x27;s actually substantiated is the spread that ibuyers have (eg. buying a house at $895k and selling at $905k), which is more &quot;markup&quot; than price distortion. Supermarkets have markups as well, but I wouldn&#x27;t characterize them as &quot;distorting price&quot;.<p>Further down there&#x27;s mention of some sort of conspiracy to corner the housing market or something.<p>&gt;Such a model costs too much, Garg said. “I don’t like it because it means that consumers are going to lose money,”<p>Of course they&#x27;re going to lose money, compared to if they waited and found the perfect buyer. But in exchange they get liquidity. On the flip side, there&#x27;s also costs to not having liquidity, eg. the market moving against you, or having to wait months for a sale.<p>&gt;Garg compared the iBuyer model to ticket scalping, noting that iBuyers tend to be most active in hot markets like Phoenix and Raleigh.<p>ticket scalping happens because bands sell tickets for less than it&#x27;s worth, usually to whoever shows up first. the scalper&#x27;s role is therefore as an arbitrageur, buying something that&#x27;s mispriced and selling it for market price. Is there any evidence that&#x27;s the case for zillow? Are they beating everyone to the houses that are mispriced?