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Is Zillow Offers Worth It? What Home Sellers Need to Know

Zillow Offers, the iBuyer arm of online real estate leader Zillow, has rapidly expanded to become one of the top iBuyers in the country. But when should sellers work with them, and when should they look elsewhere?
Is Zillow Offers Worth It? What Home Sellers Need to Know

Zillow Offers follows the general iBuyer model: users fill out a form online and receive a quick cash offer. If they accept, that's all there is to it; the can close the sale in a matter of days and receive a prompt cash payment.

While the simplicity and speed of Zillow Offers appeals to a lot of sellers, they come at a cost. It's free to request an offer from Zillow, but if you sell to them, you'll receive a below market offer and pay a service fee that can start at 7% of the sales price.

Before deciding to sell to Zillow Offers, talk with a local real estate expert and weigh your options. An agent can let you know how much money you might miss out on and other ways to quickly sell your home.

> Reach out for a free, no-obligations consultation with a local expert.

To help you start your research on the best way to sell your home, here's all you need to know about Zillow Offers and if it's worth the cost for you.

What is Zillow Offers?

Zillow Offers is the iBuyer option of the leading real estate website Zillow. Homeowners can now sell their homes directly to Zillow Offers by filling out a convenient online form through the website. Zillow will then submit an all-cash offer.

If the homeowner decides to accept, they can close on their home within seven days, which is significantly faster than a traditional sale.

Zillow Offers has proven to be a major success already. In just over a year, Zillow Offers has gone from an in-house experiment to contributing 40% of Zillow's overall profits. So it's no wonder that the company plans to expand Zillow Offers into 26 total markets by the end of 2020.

How does Zillow Offers work?

Zillow Offers follows the traditional iBuyer model, but with some minor differences.

  1. The seller fills out an online form on the Zillow Offers website. You'll provide information regarding square footage, when the home was built, condition, etc. Ideally, you'll also include photographs.
  2. Zillow Offers responds within two business days with an offer, and a detailed explanation of the factors that went into the offer.
  3. The seller has five days to decide whether or not to accept the offer. If they do, their Zillow Offers Advisor will walk them through the rest of the process.
  4. Zillow Offers will send a home evaluator to the property. If it's determined that the home needs repairs or renovations, the cost of this work is deducted from the initial offer.
  5. If the new offer is acceptable, the seller works with their advisor to choose a closing date, which can be as soon as 7 days, or as far in the future as 90 days.

Does Zillow Offers pay fair market value for houses?

Zillow Offers appraises homes, and then deducts their service fees, which start at 7%, and the cost of any repairs or renovations that the property might need. So while the initial appraisal is likely very close to the fair market value of the house, the amount of money the seller actually nets is likely to be lower than that.

How much are Zillow Offers fees?

There's no fee at all to request an offer from Zillow Offers. But if you decide to accept their offer, Zillow Offers does charge a service fee around 7%. Compared to the traditional realtor commission of 6%, this can mean missing out on thousands of dollars in profit.

Once Zillow Offers buys a home, they repair and renovate it, and then put it back on the market. This process takes months, during which time the market could decline. If that happens, Zillow Offers has taken a significant loss on the homes they've been holding. Their service fee is a built-in profit margin that's meant to offset potential losses from market fluctuations.

How does Zillow Offers make money?

Zillow Offers is an iBuyer, not a traditional brokerage. They're not finding a qualified buyer for your home; they're buying it outright.

Once they acquire your home, they do any necessary repairs, stage it, arrange showings, and negotiate with potential buyers. If the eventual sale price is higher than what they paid for it, they've made money. If it's not, they've lost money. It's that simple.

Zillow Offers Pros and Cons


  • Sellers receive a cash offer within two business days.
  • No need to do repairs or renovations before selling the home.
  • Selling to Zillow Offers means no staging or open houses.
  • The offer from Zillow Offers is fast and firm, with no risk of falling through at the last minute.


  • Offer is likely to be lower than what the house would sell for through a traditional real estate sale.
  • While the seller doesn't have to do repairs, the cost of those repairs, as determined by Zillow, is deducted from the offer.
  • Service fees are moderately high, and are generally higher than a traditional agent commission.

How does Zillow Offers compare to other iBuyers?

The Zillow Offers process doesn't move quite as fast as some iBuyers. For example, it takes them up to two business days to extend a cash offer, while other iBuyers will extend an offer in less than 24 hours.

But their 7% fee is certainly on the low end of the iBuyer spectrum, with some companies charging over 10%.

Plus their Zillow Offers Advisor program, which provides sellers with a kind of concierge to guide them through the process, is a much-needed addition to the whirlwind process of selling to an iBuyer.

How does Zillow Offers compare to selling with a real estate agent?

Using Zillow Offers is a much faster and more streamlined process than selling with a real estate agent. However, selling with an agent will get a seller significantly more money.

The numbers are very clear on this. An iBuyer will generally offer from 50% up to 90% of a home's value, since they're the actual purchaser and must have a built-in profit margin. They also charge fees that range from 7% to 12% or more.

A top real estate agent can get sellers offers above a home's fair market value through savvy negotiation, timing of the local market, and leveraging their network.

Since they're paid on commission, they're incentivized to get the highest price possible for your home.

The median home value in the U.S. is just under $230,000. Selling that home to an iBuyer would net an average of 80% of the fair market value, or $184,000, before the service fee is deducted. Assuming an agent gets you fair market value and charges you a 6% commission, you'd walk away with about $216,000 if you list with a traditional agent.

In conclusion: Is Zillow Offers worth it?

If you're looking to offload an unwanted property, or if you're under external pressures to sell as fast as possible, Zillow Offers is definitely an option you should seriously consider. They extend fast offers, have a transparent process, and services fees that are on the low end of the spectrum for iBuyers.

But if you have time to go through a traditional sale, using an experienced real estate agent can net you more money.

Make sure you understand all your options before choosing between Zillow Offers, another iBuyer, or other options. Reach out today for a free, no-obligation consultation about the best route for you.


Jamie Ayers
Jamie Ayers

Jamie is the Director of Content at Clever Real Estate, the free online service that connects you with top real estate agents and helps you save thousands on commission. In the past, Jamie has managed columns for clients in a variety of leading business publications, including Forbes, Inc., CEO World, Entrepreneur, and more. At Clever, Jamie's primary goal is to provide home sellers, buyers, and investors with the information they need to successfully navigate the ins and outs of the real estate industry.

See all Jamie's Posts

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