By now you have called in to refill your Xanex Rx after learning that Zillow is not only democratizing the home buying process, it’s turning it into an Amazon-like experience. We knew this was coming.
The online real estate disruptor announced this week a pilot program for buying and selling homes online called “Zillow Instant Offers.”
The way it’s working now: if the seller chooses to use the “Instant Offer” program, they will also receive a comparative market analysis from a local real estate agent, free of charge. That can help them decide if they want to proceed with the sale, and it might even lead to a lead for the providing agent.
One might ask, why not use a “Zestimate”? I mean, Zestimates drive us all crazy, though I think, I hope, by now homeowners know it’s really a starting point, nowhere near the actual value. Last year Zillow announced they had significantly improved the accuracy of the Zestimate tool, and after all, they said, home is worth only what someone is willing to actually pay for it. I believe there are nuances in that phrase: interest in real estate spurs more looking, which in turn spurs more buying. But keep repeating the fake message enough and it becomes the truth!
So it’s interesting that at this critical juncture, Zillow is looking to boots on the ground agents with knowledge of the market to back up their AVM. Maybe this is the mousetrap…
According to Zillow:
To participate in Zillow Instant Offers, verified homeowners interested in receiving investor offers confirm information about the home (number of bedrooms, square footage, etc.), highlight any updates and provide several photos of the home. From there, select investors who buy homes in the area can present their offers alongside the CMA from a local real estate agent. Any investor offers and the CMA will include an overview of fees associated with each option, to enable sellers to make an informed apples-to-apples comparison.
Of course there is no obligation, but Zillow says the program will help sellers who may not be interested in the traditional home selling process.
“People today expect speed and convenience as the foundation for many of their transactions – including when buying or selling a home,” Zillow said in a release.
“Selling a home can often be an overwhelming task as home sellers have the challenge of getting their home ready to list on the open market, while facing the uncertainty of when their home might sell and at what price,” Zillow continued.
“By using the Zillow Instant Offers marketplace, home sellers can alleviate some of that stress by eliminating the need to prepare their home for sale (staging, open houses, etc.), and gain additional control and certainty over aspects like closing date and price,” Zillow added.
Sound familiar? Sound like OpenDoor?
Opendoor is an online marketplace that buys homes directly from homeowners. (Don’t confuse with Door, a flat-fee brokerage.) Currently operating in Phoenix and Dallas-Fort Worth, a homeowner goes to Opendoor, plops in details about their home, and gets a near-instant price quote for the home. Of course I have tried this and would not sell my home for the near-instant price they came back with. No way Jose.
But it might work for some people. For example, Then, if the seller accepts, Opendoor then allows the seller to close on the sale when they’re ready, rather than on the timeline of another buyer.
While Opendoor cuts real estate agents out of the process, thought the company has them on staff as employees, Zillow remains agent friendly and says “Instant Offers” will include realtors throughout the process. One wonders how those will be selected?
“During this test in Las Vegas, Nev., and Orlando, Fla., Zillow is working with a handful of agents and select investors in each test market, who are active in the area. Participating agents will be requested to record the sale with their local Multiple Listing Service.”
According to Inman Invitation Homes is participating in the pilot.
So why is Zillow doing this? Jeremy Wacksman, Zillow Group’s chief marketing officer, said that the company is trying to fulfill the needs of its users.
“Sellers are looking for more solutions when selling their home. For some, selling in a short timeframe with certainty around the closing date is attractive, or even necessary,” Wacksman told Housingwire Magazine.
“Across many industries, we’re seeing a rise of technology assisted transactions, and many consumers desire this type of innovation in real estate. We want to provide options for convenience, while providing home sellers with useful information to help them make an informed financial decision. That’s why we provide them with any offers submitted by investors, as well as an estimate from a real estate agent who can help them better understand what that home may sell for on the open market.”
Yeah yeah yeah. Of note: transactions will be facilitated by DotLoop, a company that enables brokerages, real estate agents, and clients to share, edit, sign and store documents digitally. Conveniently, DotLoop is also a subsidiary of Zillow Group.
According to the Inman piece, Zillow will not be, for now, taking a cut of these transactions, so that takes care of RESPA (Real Estate Settlement Procedures Act) concerns. RESPA is currently investigating Zillow’s real estate agent advertising program.
But it will certainly lead to more audience engagement.
Question is, will this work? Millennials do everything on line, will they buy and sell houses there too? The key is the price points. Has Zillow invented a better mousetrap? Is this another seismic shift or another swipe to real estate agents?