Zillow offers a business model: they are looking for homes that are relatively new, in good condition and that fall within what they consider “high-opportunity markets”, where the possibility of quick resale is possible. If you have a “repair” plan, your home may not qualify. Zillow Offers is Zillow's iBuyer branch. As the name suggests, iBuyers are companies that use data comparison technology to offer light-speed cash offers on homes for sale.
By taking advantage of sophisticated home valuation algorithms, iBuyers can estimate the market value of a home for sale and, with a reasonable degree of confidence, eventually resell it for profit when market conditions are more attractive. According to their website, homeowners who sell through Zillow Offers usually receive a cash offer within two days of listing their home for sale. You're not required to work with a traditional real estate agent when you sell through Zillow Offers. In fact, the company encourages you to lower your cost by working with a member of Zillow's team of offer advisors.
If you've already signed a sales contract with a real estate agent, keep in mind that you'll continue to pay their commission if you accept an offer to buy from Zillow Offers. Since most agents charge a hefty 3% commission, it's rarely profitable to hire a real estate agent for what is essentially submitting a DIY online form. Remember, everything is negotiable in real estate. Don't rule out using a real estate agent because you think you should pay between 6% and 10% in commissions.
Agents can negotiate lower rates depending on the type of transaction, the services required and the frequency of the deal. For example, if you look at customer feedback on popular forum sites such as Reddit, it quickly becomes clear that Zillow Offers is reputed to sell poorly and uses internal evaluations to overcome unfair closing conditions or sharp reductions in offer prices. To further improve the offering, sellers will also benefit from a wide range of agent benefits, including comprehensive in-person sales support and thousands of dollars in commission savings. Your UPNest agent will be with you every step of the way, from marketing your ad to guiding you through the final closing negotiations.
Zillow strives to provide a secure online community, but you should always be careful when giving out personal information, financial information, or payments of any kind to people you don't know personally. To receive a quick offer from Zillow Offers, you'll need to use their online system to enter your address and provide basic information about your home. Zillow Offers will also deduct the cost of any repairs that are necessary to make the house move-in ready. But smart home sellers shouldn't be limited to just Zillow and should post their FSBO home on other free websites like Craigslist, Facebook and Fizber.
It was impossible to know exactly how much you would have paid in fees until you received a line-by-line breakdown after Zillow Offers completed the inspection of your home. Thanks to its opaque home valuation practices, there's no way to know how Zillow Offers calculates the fair market value of a home for sale. The company will then prepare a final offer, which will take into account the cost of any work required to prepare for the move of the house. However, even if this were true, Zillow Offers rates were substantially higher than what you would have paid with an agent who listed their house on the open market.
The offer took into account Zillow's service fee, sales costs, and the repairs Zillow had to perform before reselling the house. Since then, Zillow has finally decided to transform into a one-stop-shop, offering not only free information, but now helping consumers find loans, insurance, home guarantees, and even closing lawyers. If you decided to move forward, Zillow Offers scheduled an on-site home inspection to identify necessary home repairs. Your house ad will be harder to find compared to agent-assisted listings because Zillow hides houses a bit from the FSBO.
Originally known as Zillow Instant Offers, Zillow Offers is the second largest instant buying organization (iBuyer) in the country. If interested, you can proceed with an in-home evaluation and review a final offer, which will consider the sales fee for the Zillow offer, closing costs, and the estimated cost of repairs. In addition, the homes owned by Zillow were empty, so you didn't have to worry about coordinating the moving schedule with an occupant. The total cost of selling to Zillow Offers could have been between 9 and 22% compared to the average cost of 7 to 10% of running an ad with a real estate agent.