Good News For Sellers: Zillow Is Buying Homes Offering Fast CashOriginally published in Forbes
by Ellen Paris
Here’s good news for sellers. Zillow® (NASDAQ:Z) (NASDAQ:ZG) is now buying homes directly from sellers in Las Vegas and Phoenix offering fast cash. The Zillow Group, Inc. recently announced it is stepping up the Zillow Instant Offers™test program from the Las Vegas and Orlando markets into Phoenix. In the original pilot program, Zillow rolled out last May, Zillow’s buyers were direct Zillow investors buying these Zillow Instant Offers homes, then reselling at a premium.
Listen to Jeremy Wacksman, Zillow Chief Marketing Officer. When Zillow started testing Zillow Instant Offers last summer we saw it as a way to help sellers who were struggling. They needed to consider options and alternatives by making a quick clean cash sale where they control the timing and the terms. Zillow buying directly from sellers offers additional opportunities for both Zillow and sellers.
Interested sellers receive a cash offer from Zillow, usually within 48 hours. That price is then confirmed a few days later when Zillow has a home assessor and home inspector physically inspect the property. In addition, to the Zillow offer the seller receives a Comparative Market Analysis (CMA) from a licensed agent at a traditional real estate brokerage firm on their home’s current market value.
This offers total transparency to sellers who can review Zillow’s cash offer and compare directly to the valuation the agent provides. The seller can move forward with Zillow, the agent or do nothing right now. The decision rests with the seller, Wacksman explains.
Sellers who are interested in the Zillow Instant Offers program are asked to provide a variety of data on their homes and upload interior/exterior photos to Zillow prior to receiving an offer. Information Zillow requests from sellers include the home’s address, basic home details including the year built and square footage. They are asked to answer a few questions about updates or upgrades to the home, as well as other information pertinent to the home’s value.
Need a quick 21-day escrow, Zillow will accommodate. Need to lease-back for a few weeks if you are buying another house and can’t close simultaneously, sell to Zillow. Have a hot job offer in Boston and must sell your home in Las Vegas or Phoenix, look to Zillow. Zillow sellers don’t have to put up with the inconvenience of showings, open houses and sticky closing dates.
For the real estate brokerage piece of this program, Zillow has partnered with: West USA (Phoenix), Berkshire Hathaway HomeServices Arizona & Nevada Properties (Phoenix and Las Vegas), and Coldwell Banker Premier Realty (Las Vegas).
Bob Hamrick, CEO of Coldwell Banker Premier Realty in Las Vegas couldn’t be happier. As a company we figure how to capitalize from every type of industry disruption. This partnership with Zillow allows our agents to remain in the sales equation. It is a tremendous solid lead generator for our leading listing agents who the seller may decide to go with for the chance to get a higher price for their home when sold through an agent.
There are variables in each home sale price where Zillow is the buyer. How big a discount a seller takes when selling directly to Zillow is figured based on the home’s value minus the “fee” Zillow factors in when deciding what to offer to a seller.
This works best for a home where there is not a lot of work needed and the property is near market ready. If we need to paint and carpet then that gets figured into the fee and the amount we will pay, Wacksman continues. We see consumer demand expanding. Certain sellers are open to taking less so they can get a cash deal, without showings and can control the timing of the sale, terms and closing dates which they can do with Zillow as the buyer, he adds. When pressed Wacksman did confide the discount the seller may take could be anywhere between 10-15% or even higher. It depends on the home, market conditions and other factors. For some people it’s worth taking less, not worrying if the sale will close and being able to move quickly.
According to Wacksman, Zillow is initially financing these home purchases inside their own balance sheet. He estimates Zillow will purchase between 300-1000 homes by year-end and look to other potential markets for expanding the program.
For some sellers Zillow’s Instant Offers makes good sense. Do consider a good deal only works when you are satisfied months later with the price you got.
Date : 4/16/2018