Unless you’re the kind of person who spends several hours each day scrolling real estate news items, you maybe missed a pair of real estate news stories that seemed at first minor and unrelated. Since I am a person who lives on the real estate web (while simultaneously listening to podcasts about the Golden State Warriors), I saw them, saw the relationship between them and recognized that the alarm bells they tripped were distant but very clear.

Item No. 1, from the Wall Street Journal: Koch Industries, owned by permanent resident of most San Franciscans’ red state takeover nightmares Charles Koch, is “emerging as a major real estate investor during the pandemic.” Koch is a billionaire, courtesy of the oil refining company he, along with his recently-passed brother David, inherited from their father. Over time, the Koch brothers expanded their empire to the point where you’re putting pennies into the family coffers every time you throw on some Lycra workout gear, drink from a Dixie cup, panic buy 28 rolls of Northern toilet paper or lay down some Stainmaster carpet in your home. We know Koch as a conservative bogeyman, a massive donor to libertarian and Republican Party causes, think tanks and institutions. Now he’s aiming to be your landlord.

Ironic, right? You wish forever for the demise of your landlord, listen to the Dead Kennedys’ “Let’s Lynch the Landlord” on repeat and end up with Charles Koch as your landlord.

Item No. 2, from Bloomberg: Opendoor, a tech-based real estate outfit (whose promise to make selling your home easier than buying a pallet of Charles Koch-approved toilet paper from Amazon) has made it a Wall Street darling despite sketchy earnings reports, has an innovative plan to help buyers otherwise overwhelmed by today’s surprisingly hectic market: If you are preapproved for the program, Opendoor will back your traditional down payment-plus-loan offer with cash, turning it into a simple, all-cash offer — the kind sellers love best.

What happens here is that Opendoor basically buys the house, then sells it back to you if/when your loan funds. It’s almost foolproof — Opendoor actually funds loans for buyers who want to bypass traditional banking entirely — but to quote the great Pee Wee Herman, “There’s always a big but.“

In this case the “but” is the “if” part of “if/when your loan funds.” If it funds within 120 days, you’re in the clear. You technically buy the house back from Opendoor and start your life as a homeowner. If it does not fund — and again, this is a minor detail that’d be easy to miss if you weren’t poring over this stuff at a level equal to that which normal people study the lives of Prince Harry and Meghan Markle — let’s face it; you’re in trouble.

You have 120 days to work out the details. After that, Opendoor begins charging you a fee. To this point, the transaction has been no-fee, but that changes if you haven’t been able to secure your funding in 120 days. After that, Opendoor charges 0.02 percent daily, which sounds like pennies, but is actually $2,000 a day for a $1 million purchase.

That can continue for another 120 days (or $24,000 in fees) before, at 240 days, if you still haven’t found financing, Opendoor takes your house and adds it to what is beginning to sound to me like their ultimate goal: a massive property portfolio.

Now look, this shouldn’t be a big risk. It should be a slam dunk, but sometimes slam dunks clang off the rim. If that happens, you lose the house.

Is it a bad thing if Opendoor — and Zillow (whose new plan to make all-cash offers to sellers based solely on their “Zestimates”) positions the company to further expand its role as a real estate broker — becomes the place to buy a house? It’ll be as easy as buying toilet paper on Amazon, right?

There are downsides: destroying the real estate industry as we know it, for example, and the risks posed by a centralized housing pool controlled by a handful of companies. Do you think your Zestimate is fair? In this scenario, you’ll have to.

Should buying a home be as easy as buying toilet paper?

Finally, I ask you again, do you care where you’re sending that check? You can buy a house from an individual or you can buy it from Opendoor (and Zillow). You can pay your rent to the guy who owns the building and lives upstairs or you can pay it to Charles Koch. The choice is yours… for now, at least.

Larry Rosen is a San Francisco-based writer, editor, podcaster and recovering former Realtor. He is a guest columnist and his viewpoint is not necessarily that of the Examiner. The Market Musings real estate column appears every other week.

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