Published by Kartik Subramaniam
Zillow has recently announced that it's going to start buying and selling houses.
This is a surprising move because it feels like the website is jumping 2 to 3 steps ahead of what it's currently doing with the "Make Me Move" offer system, which is merely a seller's way to gauge what the interest would be for their home if they listed at a certain price.
What are the details of this new development with Zillow? How will this affect buyers, sellers, and real estate agents?
Zillow Instant Offers
This is a concept that Zillow is currently testing only in the Phoenix and Las Vegas area. The company is basically acting as the principal in real estate transactions.
Zillow is launching their Instant Offers concept in these specific markets to offer homeowners "greater control over the selling process" and a "more predictable time frame" for the sale.
This program bears some similarity to the way Opendoor or OfferPad work, offering convenient and quick sales at the expense of the best sales price. Speed is the name of the game.
What It Looks Like on the Seller's Side
A homeowner in the area who wants to sell their home can give Zillow their address and answer an online questionnaire about the home. Zillow will then make an offer on it. If the seller agrees to the price, then there will be a home inspection. Then, a Premier Agent will be chosen as the listing agent to close on the deal.
The Buyer Side
If a private buyer is interested in a property that's for sale in those areas, he or she can send an email to Zillow and tell them they want to buy it. If the numbers make sense to the company, then they'll then wire the money over to the owner. The buyer gets the house, and the seller gets to move. It's all meant to be a quick and seamless process.
What about Real Estate Agents?
In short, Zillow intends to keep agents in the selling process, but the program will benefit a select pool of agents. However, the company is confident that they're giving agents highly motivated leads, saving them time and hassle.
If Zillow buys the home, the company will pay a real estate commission to a premier agent that they'll select as the property's listing agent. This means that ordinary agents who haven't paid to be promoted on the website will be excluded.
Zillow explicitly states that the program will benefit only "pre-selected partner Premier Agents and brokers" at this time. As you know, it costs money to get into this inner circle, so it will be up to the individual agent to determine whether this investment will be worth it.
Another detail is that Zillow will be teaming up with Berkshire Hathaway HomeServices Arizona. As we find out more about this partnership, we'll let you know about it.
What happens to the home if Zillow buys it?
If Zillow buys the house instead of a private buyer, then the company will fix up the property and resell it. According to the Las Vegas Review Journal, the company aims to buy the houses below market value in order to flip them for a profit. This naturally means that the seller might not profit as much as she could have if she sold her home in a more traditional way.
If Zillow's offer is turned down by the seller, then the homeowner is free to sell the home through an agent on the open market.
The company's Chief Marketing Officer Jeremy Wacksman expresses the modern homeowner's need for a quick sale at the expense of not selling for top dollar, "[Homeowners] want help, and while most prefer to sell their home on the open market with an agent, some value convenience and time over price.”
Tell us what you Think
What's your take on Zillow's latest move? As a homeowner, would you sacrifice profits for convenience? In today's fast-paced world, there are always going to be attempts to make the process of selling a home become quicker.
The Value of an Agent
Though selling in the open market with an agent from the get-go may take longer, homeowners get the peace of mind that they are going to sell for the highest price possible and have access to expert real estate advice throughout the whole process- not just the closing phase.
If you have any comments, please post below. Don’t forget to check out our YouTube channel for all the latest news and information on the real estate market. I recorded a YouTube video on this Zillow development. You can check that out here.