The real estate sales arena has seen a major transformation over the past few years, with an influx of unconventional agents that promise ultra-fast sales in return for near-instant cash. In fact, you’ve probably seen the likes of “We Buy Houses for Cash” advertised via billboards, commercials or direct-mail leaflets.
One of the newest entrants to this specific marketplace is that of Zillow, who are now engaged in an Instant Offers program of their own.
Here we take a look at what Zillow Instant Offers actually is, alongside the program’s main pros and cons.
Sell your house fast and get top dollar!
List with Clever, work with a top realtor, save thousands on commission.
What is the Zillow Instant Offers Program?
For those unaware, 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. In order to spearhead the platform’s growth, Zillow is now engaged in a program that specializes in “Instant Offers.”
As the name suggests, the instant offers program is targeted at U.S. homeowners who are looking to sell their property in the quickest time possible. In order to facilitate this, Zillow utilizes the services of 15 private large-scale investors who are at the ready with cash.
According to the Instant Offers platform itself, Zillow advises prospective sellers not to clean their home, as viewings won’t be necessary.
Moreover, they also promise to take care of repairs and even allow sellers to specify their move date. All of 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 ultimately comes at a cost. These costs are the very same costs that you will be accustomed to when using other agents that fall under the ‘Instant Buyer,’ or simply ‘iBuyer’ umbrella.
Before moving into the potential drawbacks of such a program, let’s quickly recap on the advantages of the Zillow Instant Offers scheme.
Pros: What are the advantages of using Zillow Instant Offers?
- Sell your house significantly quicker in comparison to traditional channels
- No need to engage in viewings
- Repairs are taken care of
- Specify your move date
Zillow Instant Offers: What to Consider
Potential Buyers are Investors Looking for a Quick Profit
First and foremost, it is crucial to understand the motivating factor of the Zillow Instant Offers program. As noted above, the program is backed by 15 large-scale real estate investors. Their primarily goal is generally considered to be on two key fronts.
Either they are looking to purchase ultra-cheap properties that will allow them to buy, repair and flip, subsequently netting the investor a quick profit, or they are looking to obtain a cheap property that allows them to enter the rental sector.
Either way, the key word here is “cheap.” In other words, although you’ll receive a speedy offer, the vast majority of these offers will be considerably lower than what the property is worth.
Pool of Potential Buyers is Capped at Just 15
These issues are further amplified when one considers that there are just 15 potential buyers. By limiting yourself to such a small pool of investors, you are essentially restricting yourself from achieving a worthwhile offer that is closer to the fair value of your home.
On the contrary, by getting your home in front of as many buyers as possible, this surplus in the competition will spearhead a higher sale price.
High and Unclear Costs
At the time of writing, Zillow Instant Offers reviews currently circulating around the public domain make it unclear as to types of fees home sellers will need to pay. Moreover, Zillow themselves do not make this clear. Upon delving into the terms and conditions of the program, it appears clear-cut that buyers, who are one of 15 potential investors, will need to be represented by an agent.
This is problematic, as this will essentially amplify the below-value offer that you are likely to receive, taking into account the likelihood of unreasonable agent fees.
Ultimately, in the wider iBuyer arena, it is not uncommon for homeowners to pay more than 10% in fees. This is significantly higher than the industry standard, which often amounts to around 6% for the seller.
Before moving on to the final section of our guide, let’s quickly recap the disadvantages of using the Zillow Instant Offers program.
Cons: What are the disadvantages of using Zillow Instant Offers?
- Investors looking for an ultra-cheap deal to make quick profits
- 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
Sell Your Home Fast Without Losing Significant Levels of Equity
We understand that there is potentially an array of reasons why you want 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 you being offered an amount that is significantly less than what your home is worth.
In the grand scheme of things, the best course of action is to instead utilize the services of an established local real estate agent. These agents will have formulated a long-standing network of contacts in your specific housing market, and thus, they’ll be able to find you a buyer quickly.
However, the key difference is that you won’t be accustomed to highly unreasonable offers that leave you with considerably less equity than you should be getting.
Recognizing the need to find an alternative to the iBuyer space, we at Clever have created a network of Agents that have agreed to follow our competitive pricing structure. By using a Clever Partner Agent, not only will you be able to sell your home fast, but you’ll pay a flat fee of just $3,000 or 1% if it sells for over $350,000.