Recently, Zillow Offers expanded its program into the South Florida market for select zip codes. With the program, homeowners in eligible neighborhoods can fill out their information and receive a no obligation cash offer back from Zillow within days.
If the seller accepts the offer, they can choose their closing date and moving date for between 5-90 days. The upside is they can very likely count on the buyer having funds and completing the transaction in as little as 5 days. Also, properties that might be harder or slower to sell on the market due to needed repairs or deferred maintenance can possibly be sold to Zillow without them complaining very much.
So, what’s the downside? Well, money of course. A cash offer with that much flexibility and ease for the seller is likely to come in at a wholesale rate. You have seen the signs, “We Buy Ugly Houses”. That is another company that offers fast cash offers on your home in our local area, although they are probably a lot less tech savvy than Zillow Offers.
Who could benefit from Zillow Offers?
You can benefit from a program like Zillow Offers if you have tried selling your home, have not received offers and are running out of time. If you have to sell and close in extremely short order, say, 2-3 weeks and have enough equity in your home that you won’t miss the difference in cash at the end. If you value convenience and time over money in the pros and cons list of your home sale, then Zillow Offers is great for you. Also, if your home needs repairs that make it unattractive to regular buyers, you may benefit from Zillow Offers. Most other sellers are better off hiring a good Realtor® and enjoying the many benefits of a competitive housing market and their Realtor’s® experience and hard work. Hiring a Realtor® has been statistically shown time and time again to net sellers more money in their pocket. Sellers also have less worry, more peace of mind, etc.
Who might lose out if they accept an offer from Zillow?
South Florida is a fast paced market. If your home is in good shape and it’s priced right where it needs to be to juice up some competition, it’s not uncommon to see cash offers or multiple offer situations. If you get a cash offer from a buyer on the open market it will likely be higher than the wholesale offer Zillow might be proposing. Usually a cash buyer on the open market has more ties to the area they are searching and there are other factors that encourage them to offer more than would Zillow with their investment-focused mindset. Cash offers can close quickly especially if they are marketed properly from day 1.
If you receive an offer with a buyer who is financing you will need a longer runway. But you may have a little more time. For instance, if you are the same person who would take advantage of Zillow Offers’ 90 day closing, I don’t see why you wouldn’t just hire a Realtor®. A good Realtor® can sell your home in 90 days, assuming you don’t have things like code violations, title defects. probate issues, etc. Selling on the open market with a good Realtor® is likely to net you 10s of thousands, possibly even more than selling directly to Zillow without ever marketing your property at all.
If you are prudent you will call a local Realtor® and have them come to your home and give you a comparative market analysis that will tell you the best price to list your home and what range you can likely expect to sell. Your home may not be in as bad condition as you think and the market in your neighborhood might be much stronger than you think.
It’s probably more financially beneficial for you to hire a new Realtor® rather than sell to Zillow also if you’ve tried listing your home and have been unable to sell it. As with any profession, not everyone is the right woman/man for the job you need them to do and sometimes we have to give someone else a try. That is of course, if you have the time. If you just need to get out of dodge faster than a speeding bullet, Zillow Offers could very well be your best option.
Will it hurt you to submit your information on Zillow Offers if you don’t sell to them?
It probably wouldn’t hurt you to find out what Zillow Offers would pay you cash for your home. When they call it a no-obligation offer they probably mean it. Just remember they aren’t there to do you a favor.
Zillow is a business that with your required consent will likely pass your information to another channel in their income stream, ie: selling you as a seller lead to a local Realtor® who has purchased a percentage of the zip code where you live. Now that you have given all of your home’s information and qualified yourself as a truly interested seller, your information is much more valuable. You may have experienced something similar in the past when you submitted your information on a real estate website and received hundreds of phone calls, text messages, and emails over several months.
It’s good having options
On the other hand, you can ask around to your friends or family or do your own research online and find a Realtor® you like and trust to tell you what might be considered a wholesale price for your home. It could just as easily come with a buyer ready with cash in hand and either way you will be dealing with an agent. But also, FYI, when you list your home for sale with a Realtor® in the MLS, if your home doesn’t sell after the listing expires, your information is acquired by data companies who sell it as expired listing leads to their Realtor® customers.
The Zillow Offers program isn’t just a machine that you type in your house address, see a green checkbox, and get a check in the mail in 5 days. Zillow’s program utilizes a local brokerage to represent the transaction and all the same local real estate laws, ethics, and required procedures will apply as in any other transaction. In other words, there is still work involved on your end.