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This Zillow Offers review 2019 incorporates various reviews from home buyers to real estate agents.

Before getting into the reviews of the new Zillow Offers program let’s look at what Zillow does.

 

Zillow Overview:

 

Zillow headquartered in Seattle launched in 2006.

Zillow describes itself as a “leading real estate and rental marketplace” offering consumers information, knowledge, and inspiration when seeking a home. They also connect buyers with local real estate professionals. Source

Zillow’s database provides information about owning a home. Their database includes over 110 million U.S. homes.

Their “Zestimate” estimates home market values. Source  Bloomberg calls “Zestimates” the “Kelley Blue Book for American homes”. Source

 

What is Zillow Offers?

 

Zillow Group Inc. began its “instant offers” program in May 2018. Recently, Zillow dropped the “instant” name.

According to Zillow, their Zillow Offers program allows homeowners to ask Zillow to make an offer to buy their homes. All cash (no financing) offers made within a few days. Zillow claims a faster closing than traditional listings with buyers applying for financing. Source

Zillow joined a “new breed of high-tech home flippers, sometimes called “iBuyers” including Silicon Valley startups and a small group of adventurous real estate brokerages with instant offer operations. Backed by Silicon Valley and Wall Street capital and “Zestimates” algorithms making home price predictions buying homes on a massive scale making small profits on every flip.” Source

 

How does Zillow Offers Work?

 

In a nutshell, Zillow buys houses, fixes them up, and resells them for a profit. Thus, Zillow Offers is a high-tech “Fix & Flip” houses program.

Sellers get an all-cash buyer with a fast closing date depending on the seller’s preference. Since sellers need to find a replacement home they decide when to close with enough time to buy a new home before their current home closes. The closing time between five days to 90 days.

However, Zillow does not buy every home. Their criteria remains a secret.

Here’s the process for requesting a Zillow Offer.

Homeowners provide:

  • The home address;
  • Basic home details (square footage, year built, etc.);
  • Information about the home’s past updates or upgrades; and
  • Other information relevant to the home’s value.

While photos not required, Zillow encourages uploading photos of the interior and exterior.

In approximately two business days Zillow prepares an offer. The homeowner only has five business days to respond before the offer expires.

During the five day period, homeowners may contact a Zillow Offers Advisor with questions. That advisor will walk homeowners through the next steps after acceptance of the offer.

Until the homeowner signs a sales contract he or she is under no obligation to sell to Zillow.

 

How Zillow Determines Offers

 

According to Zillow’s website, Zillow begins with its Zestimate. Then looks at the information provided in the homeowner’s application. Also, Zillow gets a local real estate agent to perform a Comparative Market Analysis (CMA).

Then Zillow factors in estimated renovation costs and repairs. The offer is either confirmed or adjusted after an in-person evaluation of the home.

Home inspection required as a typical buyer conducts. The results of the home inspection determine if the initial offer gets adjusted. The estimated costs of repairs and renovations to resell the house factors into the final offer. 

Negotiating not allowed. Homeowners either accept the initial offer and the modified offer (after the inspection) or not. However, if a homeowner points out missing or incorrect information impacting the estimated value of the home, Zillow may consider repricing the home.

Zillow also points out that homeowners do not need to prep or clean up the home.

 

Current Locations of Zillow Offers As Of This Writing

 

Currently, Zillow Offers available in these cities:

  • Atlanta;
  • Charlotte, NC;
  • Dallas;
  • Denver;
  • Houston;
  • Las Vegas;
  • Minneapolis;
  • Phoenix;
  • Raleigh, NC; and
  • Riverside, California.

New locations coming in 2019 and 2020.      

 

What Fees does Zillow Offers Charge?

 

Zillow’s website FAQ states: “There is no cost to request or receive an offer from Zillow. If you choose to sell your home to Zillow, you will receive a clear statement outlining any fees associated with the offer.” Source

Talk about vague! So, no cost to request an offer. But, once you accept Zillow’s offer then you receive a statement outlining their fees. 

Two competitors began operations like Zillow’s Offers years ago. OfferPad and Opendoor buy homes, fixes them up, and resells them for profits.

According to the New York Times, Opendoor charges a 7.5% commission much higher than other brokerages.

 

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Zillow Offers – Pros

 

Zillow Offers advantages include:

  • Selling the home faster than traditional sales;
  • No need to clean or prep the house;
  • No viewings by agents;
  • Zillow takes care of all repairs; and
  • Homeowners specify the closing and moving dates.

 

Zillow Offers – Cons

 

Disadvantages of Zillow’s Offers include:

  • Zillow investors looking for cheap deals to make big profits;
  • Lower offers than market value;
  • Ambiguous fees; and
  • Zillow only uses 15 potential buyers.

 

What Do Other Zillow Offers Reviews Say? 

 

Bloomberg points out that Zillow Offers caters to “people who will take a large discount to sell in a hurry”. Source

Bigger Pockets published a Zillow Offers user experience consisting of several problems with the home inspection results. The inspection lowered the original offer by $30,000. The writer owns 10 rentals and knew the repair estimates were too high. In the end, Zillow offered $181,000 and he refused later selling the house for $224,000. So, the Zillow Offer was $43,000 lower than the actual market value. Source   

Inman published a Zillow Offers review in 2017 claiming no benefits to the home sellers who get low offers and still pay fees above typical agents’ fees. Only the investors and Zillow benefit. Inman claims that Zillow Offers uses:

  • Inaccurate Zestimate valuations;
  • Low offers;
  • High fees; and
  • Most markets don’t need the service.  

Nerdwallet claims Zestimates as: “No more than an informative educated guess”. Source  

Some brokers point out that Zillow’s Zestimates maintain a 6% error margin in the Boston area. Source     

In 2018, U.S. News published a story claiming that opting for a Zillow “expedited home sale” is not in the best interests of the home seller.

The Truth about Mortgage site claims Zillow Offers aims at impatient sellers looking to quickly offload their homes. Initial offers often lowered after the home inspection when repairs factor in. 

The Apartment Therapy site questions the cost to homeowners. The Zillow website remains vague about what fees homeowners pay with Zillow Offers.

The List Clever site points out several problems with Zillow Offers like:

  • Zillow’s potential buyers want to buy cheap to make big profits;
  • Zillow only uses 15 potential buyers restricting the number of offers;
  • Unclear fees and costs until the final offer; and
  • Selling fast means lower offers like distressed sellers.

 

Would You Eat at a Restaurant that Yelp Rates 1 Star?

 

According to the Consumer Affairs website, on May 19, 2019, Zillow earned only a 1 Star (out of 5) ranking from 499 raters for “overall satisfaction”. Source

This begs the question: Would you eat at a restaurant that Yelp rates as 1 Star?

 

Like the Fast & Furious Movies, Negative Reviews about Zillow Keep Coming

 

Forbes published a story in 2018 about Zillow’s “Premier Agent” ad program where listing agents upload their listings. Buyers who click on a listing don’t get directed to the listing agent. Instead, they get directed to a “Premier Agent” who paid Zillow to put their name, photo and contact information displayed on other agents’ listings. The listing agent doesn’t get any buyers directed to their listings.

The Real Deal reports that New York State is investigating the legality of Zillow’s “Premium Agent” program.

The Sitejabber review site rates Zillow 3 Stars (out of 5) only because 269 reviewers rated Zillow 1 Star while 263 rated it 5 Stars. Thus, reviewers either love or hate Zillow.

The Trustpilot review site rates Zillow only 2 Stars (Poor) based on 32 reviews claiming “false information”, “Agents you’ve been warned”, and one agent claiming: “These people are con artists”. Source

 

Conclusion

 

Our Zillow Offers review 2019 research found more negative reviews than positive ones.

Zillow Offers no more than a high-tech Fix & Flip type offer:

  • Low purchase price;
  • Starts high then lowers the offer after home inspection;
  • Only a maximum of 15 investors to make offers; 
  • Vague fees and costs until final offer; and
  • Sellers make more money selling the traditional way.

 But, it’s not all bad for every home seller. Zillow Offers benefits these types of sellers:

  • Those in a hurry to sell; and
  • Wanting flexibility with choosing the closing and moving dates.

 

Want to Sell Your Home for Maximum Price?

 

Contact Us for an honest assessment of your home’s market value. Our experienced Realtors will help you with listing and negotiating with buyers to get you the best price. We’ll then help you find and buy your ideal next home too!

Steven Rich, MBA – Guest Blogger              

 

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