Updated June 20, 2019
You’ve probably seen “We Buy Houses for Cash” advertised on billboards, commercials, or direct-mail leaflets.
Today, tech-savvy entrepreneurs are adopting this “cash-buyer” model and leveraging digital technologies to flip properties on an unprecedented scale.
Known as “iBuyers,” these companies promise sellers near-instant cash for their homes. They then make minor repairs and resell the properties for a small profit.
While this represents a solution for sellers on a tight timeline, the downside is that most of these companies pay well-below market value for the homes they buy.
One of the newest entrants to this rapidly expanding marketplace is Zillow, which now has an “instant offers” program of its own called Zillow Offers.
In this article, we’ll take an in-depth look at Zillow Offers, examining the program’s main pros and cons.
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What Is Zillow Offers?
Zillow is one the largest online real estate platforms to provide consumers with real-time data surrounding property prices, valuation, sales, inventory levels and more.
To spearhead the platform’s growth, Zillow now has a program that specializes in instant offers.
As the name suggests, the Zillow Offers program targets U.S. homeowners looking to sell their property in the quickest time possible.
There’s no fee to request an offer and if you work with them, you’ll get your own Zillow Offers Advisor to walk you through the process. It’s important to note that your Zestimate on Zillow doesn’t necessarily affect your offer.
According to Zillow’s Offers page, Zillow advises prospective sellers they don’t need to clean their homes, as there won’t be any open houses and it won’t impact your offer. They also promise to take care of repairs and even allow sellers to specify their move date. All the aforementioned services sound great — so what’s the catch?
In effect, although the offer of a fast sale and near-instant cash is likely, this comes at a cost. These costs are the same expenses you will be accustomed to when using other companies that fall under the iBuyer umbrella.
Before moving into the potential drawbacks of such a program, let’s quickly recap on the advantages of the Zillow Offers system.
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Pros: What are the advantages of using Zillow Offers?
- Sell your house significantly quicker compared to traditional channels
- No need for open houses or private viewings
- Repairs are taken care of (though they subtract from your offer)
- Specify your move and closing date
Zillow Offers: Key Considerations
Why Does Zillow Buys Homes?
First, it is crucial to understand the motivating factor of the Zillow Offers program.
Zillow explains, “We don’t flip homes — we provide a service to sellers. We take care of the repairs and prep work a homeowner would normally have to do themselves to get a home ready to list, and we handle the showings, open houses and maintenance while the home is listed, so the seller doesn’t have to.”
While technically aren’t “flipping” the homes in the traditional sense, Zillow repairs these homes and then sells them using their Premier Agents for a higher price.
Sellers will have to pay Zillow a service fee — 7% or higher — which can seriously cut into their profits on the sale.
Service fee aside, the reality is that Zillow’s offering is primarily about speed and convenience, not getting a great price. In other words, expect the offers you do get to be well under market value.
These issues are further amplified when you consider there are limited regions of the country where you can use Zillow Offers, including Atlanta, Charlotte, Dallas, Denver, Houston, Las Vegas, Minneapolis-St. Paul, Orlando, Phoenix, Raleigh, and Riverside, CA.
You won’t be able to use Zillow Offers in most of the country for home selling and will need to use a local agent and your MLS or work with another iBuyer.
High and Unclear Costs
At the time of writing, reviews about Zillow Offers don’t make clear which fees home sellers will actually need to pay for the service.
Zillow does not make this particularly clear on its website, either. Though Zillow says they’ll take care of repairs, for example, these will often be priced above market value, meaning you’ll be paying more than if you hired a contractor yourself.
In the wider iBuyer arena, including companies like Opendoor and Offerpad, it is not uncommon for homeowners to pay more than 10% in fees. This is significantly higher than the industry standard for real estate commissions, which typically amount to about 6% for the seller.
Before moving on to the final section of our guide, let’s quickly recap the disadvantages of using the Zillow Offers program.
Cons: What Are the Downsides of Zillow Offers?
- Offers likely to be significantly lower than market value
- Unclear as to how much agent fees will amount to
- iBuyers often charge more than 10% in selling fees
- No comparative market analysis (CMA)
- Lower sale price
Sell Your Home Fast Without Losing Equity
We understand that there is an array of reasons why you need to sell your home fast. Whether it’s because you need to relocate for work or you’re experiencing financial hardship, a fast sale should not result in a lowball offer.
The best course of action is to use an experienced, full-service real estate agent. Local agents have access to a wide range of resources and typically, a robust professional network in their area of operation, meaning they’ll be able to find a qualified buyer quickly.
However, the key difference is that when you work with an agent, they’ll help you get better offers and negotiate on your behalf.
Recognizing the need for a cost-effective alternative to iBuyer’s offerings, Clever established a network of thousands of top-rated, local agents all across the country who have agreed to discount their normal rates in exchange for the steady stream of new business Clever provides.
When you list with a Clever Partner Agent, you’ll get all of the service and support you need to get a great offer fast — but you’ll only pay a fraction of the typical cost.
Our Partners have agreed to list and sell your home for a flat fee of $3,000, or just 1% if your home sells for more than $350,000.
If you need to sell your home quickly, don’t sacrifice your hard-earned equity in the process. , get a great price, and save thousands on commission!
FAQs About Zillow Offers
1. Can you negotiate with Zillow?
With Zillow’s Offers program, the company states they provide the best value upfront, obviating the need for a lengthy negotiation process. It may still be possible to negotiate in some circumstances, however.
2. Can I sell my house to Zillow?
In limited markets in the United States (including Dallas, Las Vegas, and Denver), you can request a cash offer through Zillow Offers. The program allows homeowners to request a cash offer from Zillow to buy their home, though there’s no obligation to sell.
3. Should I sell my home to Zillow?
If you need to sell your home quickly and want a seamless process, Zillow Offers could be the right choice for you. However, expect an offer slightly below market value and higher-than-average fees for the convenience. Working with a top-rated real estate agent will allow you to get the most for your home’s value.
4. Does it cost money to sell your house on Zillow?
If you use Zillow Offers or sell for sale by owner (FSBO), there are no fees to list your house on Zillow. However, if you work with a local listing agent for your real estate transaction, expect to pay a listing commission or fees to list on the MLS if you choose the flat fee MLS route.