Updated January 31, 2020
|EDITOR'S NOTE: We don't offer an iBuying service ourselves, but we review companies that do to help you make better real estate decisions and save money. If you don't qualify to sell to Zillow Offers or want to explore more options - check out our low-cost realtor service here.|
- Zillow Offers makes near-instant, all-cash offers on qualifying properties in 23 U.S. cities.
- You can request a non-binding offer for free online. If your home is eligible, you'll get a preliminary offer within two business days. Offers are valid for three days.
- Closing timelines are flexible. Schedule your closing date for anywhere between 7-90 days after signing your sale contract.
- Zillow's offers are generally considered fair, typically coming within 1.4% of the home's assessed market value.
- You'll pay a built-in service fee (typically 6-9%) and standard seller closing costs. Zillow Offers will also deduct any necessary repairs from your offer price following an on-site inspection.
- At the time of this writing (1/31/20), Zillow Offers has no verified customer reviews on any credible, third-party review sites.
Does Zillow buy homes?
Zillow has been buying homes since April 2018, when it launched Zillow Offers to stake its claim in the rapidly growing “iBuyer” marketplace.
iBuyers - short for “instant buyers” - are companies that use technology (and lots of investor funding) to make near-instant, cash offers on homes on an absolutely massive scale. Today, Zillow Offers is the second largest iBuyer by transaction volume after Opendoor, the company credited with launching the iBuyer movement back in 2014.
Zillow Offers' business model is relatively straightforward:
- Zillow buys properties, gets them “move-in ready,” then quickly resells them (usually within 90 days) for a small profit
- Zillow only buys specific types of houses - e.g., relatively new, good condition, within a specific price range, etc. - in select, high-opportunity markets
- Zillow makes money in three ways: short-term market appreciation, its built-in service fee, and passing along seller leads (who reject the cash offer) to its Premier Agents, who pay the company a referral fee
Importantly, Zillow Offers and other iBuyers are not house flippers - at least in the traditional sense. Because they're buying up homes on such a large scale, they're able to keep their margins much slimmer than traditional “ We Buy Houses” companies, which allows them to pay much closer to fair market value (on average, 98.6%) for the homes they buy.
How does Zillow Offers work?
At a Glance
Like other iBuyers, Zillow Offers strives to make the home selling process as quick and hassle-free as possible. First, you submit some general information about your home - your address, some photos, size, age, condition, etc.
If your home is eligible for purchase, Zillow Offers will crunch the numbers and get back to you with a preliminary offer within two business days. You have three days to accept or decline the offer. Once the offer has expired, it is no longer valid. If you still want to sell to Zillow Offers, you'll have to submit a new request.
If you accept, Zillow will send a representative to do an on-site inspection, assess any necessary repairs, and finalize your offer. Once you've accepted the final offer and signed the sale contract, you'll work with a Zillow Offers Advisor to schedule your closing date and arrange the payment.
|Time to Offer||2 business days*|
|Offer Expiration||3 days*|
|Time to Close||7-90 days after signing sale contract*|
|Typical Discount-to-Market Value||1.4%** (or $3,800 on a $270,000 house)|
*Per Zillow Offers' website as of 1/31/19
**iBuyer Fair Market Offers Report, Mike DelPrete, 2019
Where is Zillow Offers available?
Below is a list of the 23 U.S. metro areas where Zillow Offers currently buys and sells properties. This list is up to date as of 1/31/20.
|Atlanta, GA||Las Vegas, NV||Raleigh, NC|
|Austin, TX||Los Angeles, CA||Riverside, CA / Inland Empire|
|Charlotte, NC||Miami, FL||Sacramento, CA|
|Colorado Springs, CO||Minneapolis / St. Paul, MN||San Antonio, TX|
|Dallas, TX||Nashville, TN||San Diego, CA|
|Denver, CO||Orlando, FL||Tampa, FL|
|Fort Collins, CO||Phoenix, AZ||Tucson, AZ|
|Houston, TX||Portland, OR|
Zillow Offers Reviews
At the time of this writing (1/31/20), Zillow Offers does not have any verified customer reviews on reputable third-party review sites.
While the company does feature reviews of its service on its own website, there's no discernible submission form or process on the page. This suggests that Zillow Offers' on-site reviews are requested directly from customers and curated by the company - not uploaded directly by users. In other words, take these reviews with a grain of salt, knowing they're not necessarily painting a complete, objective picture of sellers' experiences.
On Zillow Offers' review page, some of the most common themes were:
- Fast and easy process
- Professional, knowledgeable, and friendly team
- Flexible closing timelines
That said, several home sellers have shared experiences in which their initial offer from Zillow was reasonable. But following the home inspection, the offer price dropped to an extent that the sellers felt was unjustified - more than $20,000 and $40,000, respectively.
Of course, because requesting an offer from Zillow is free and non-binding, you don't have a ton to lose by trying it out. Just go in with a clear head and don't assume the final sale price is going to match the initial offer.
Opendoor vs. Zillow Instant Offers: Who Wins?
Opendoor and Zillow both buy homes for cash, but there are some important differences between the two companies that are definitely worth taking into account.
Size / transaction volume
From January to October 2019, Opendoor bought nearly 3x more homes than Zillow Offers - the higher volume enables Opendoor to maintain profitability with slimmer per-transaction margins, which (theoretically) means it can make more competitive offers for the homes it buys.
Opendoor's business model is all about buying and selling as many homes as possible. It's been suggested that Zillow, on the other hand, is leveraging its iBuyer service to generate more seller leads. Zillow's purchase rate - number of offer requests vs actual homes bought - has consistently hovered around 2%. This suggests that Zillow Offers may be more interested in hooking sellers in with the promise of a fair cash offer, dropping the price post-inspection, then referring (i.e., selling) them off to agents in its Premier network when they invariably reject it.
Opendoor is rapidly expanding its suite of real estate services. From trade-ins, home loans, and partnerships with home builders, agents, and other real estate vendors, it's angling to become an end-to-end real estate service provider, covering every aspect of the process for sellers and buyers. Zillow, on the other hand, provides two services: cash offers, or referrals to traditional agents in its network - at least for now.
As of 1/30/20, Opendoor and Zillow Offers have a similar footprint in terms of market coverage. Opendoor buys homes in 21 U.S. cities, Zillow Offers is available in 23. That said, both have plans for continued expansion in 2020 and beyond. We recommend visiting their websites for the most up-to-date locations.
Below is a quick breakdown of some of the two companies' key services and benefits.
|Free offer within 24 hours||✓||x (48 hours)|
|No showings, listings, open houses||✓||✓|
|Pick your own closing date||✓||✓|
|Cancel the sale at any time with no penalty||✓||✓|
|Offer valid for 5 days||✓||x (3 days)|
|Home trade-in program||✓||x|
|Partnership with major homebuilders||✓||x|
|14-day “late checkout” option||✓||x|
Conclusion: Is Zillow Offers worth it?
Zillow Offers is certainly worth considering if you live in one of its covered cities and are looking to sell quickly and/or avoid the hassle and uncertainty that often comes with listing on the open market. Because requesting an offer is free and comes with no obligation, there's really no harm in exploring it as an option.
However, before you make a final decision, be sure to thoroughly explore every option at your disposal. Your home is too valuable not to.
If you're set on selling to an iBuyer (and your home meets the strict eligibility requirements), we recommend requesting offers from several before moving forward. Here's a list of other iBuyers and trade-in services worth investigating:
It's also definitely a good idea to reach out to one or two local real estate agents to see if they might be able to help you sell within your required timeline - and for a better price.
The key takeaway is that there's no single right answer. The best approach ultimately depends on your specific situation and goals. If you're currently weighing your options for how to sell your home, Clever can help!
Our team of licensed real estate experts is standing by to answer questions, offer advice, and refer you to different services and solutions to fit your needs. Importantly, our referral service is 100% free and there's never an obligation to move forward with any of our recommendations.
Frequently Asked Questions about Zillow Offers
Can you negotiate with Zillow?
According to Zillow Offers, the company provides its “best offer up front.” Zillow believes “this creates a simpler, more predictable experience for sellers compared to the often lengthy negotiation process of a traditional sale.” Zillow does state that if you feel that the offer may have been based on faulty information or overlooked some important details, you can reach out to a Zillow Offers Advisor to make your case. That said, in most cases, these offers are a take-it-or-leave-it scenario.
Are Zillow's offers fair?
Zillow Offers strives to “present an offer that reflects the current market value of your home.” According to real estate technology expert Mike DelPrete, it actually comes pretty darn close. He recently conducted an in-depth study that found the average discount to market (i.e., missed profit opportunity) among iBuyers was approximately 1.4% - or $3,500 on a $270,000 house.
Note that these offer prices don't factor in Zillow's service fee (typically 6-9%), assessed repair deductions, and closing costs, meaning that the amount you walk away with will likely be considerably lower. If you're looking to get the best possible price for your home and save on fees, we recommend exploring other options, like a low-commission real estate agent. That said, many sellers feel the convenience, certainty, and speed gained through selling to an iBuyer are well-worth the cost.
Does it cost money to sell your house on Zillow?
Nope! It's 100% free to list your home on Zillow for sale by owner (FSBO) or with an agent. That said, this isn't because Zillow is feeling generous - rather, as is the case with many “free” online services (think Google, Facebook), when you list your home on Zillow, YOU become the product. Zillow makes a huge chunk of its revenue by selling user data to agents in its Premier Network. In other words, you post your listing on Zillow, Zillow sells your information to local agents, who then hound you relentlessly until you agree to let them represent you (and pay them a full listing commission on the sale).