Zillow’s iBuyer Instant Offers Program is “testing” home sellers markets in Orlando, FLA, Las Vegas and Phoenix, AZ. Supposedly working as a “middleman”, not a commissioned representative in the transaction, Zillow takes no remuneration for connecting home sellers with homebuyers.
Here’s how it works…the seller signs up her unlisted property with Instant Offers. Zillow encourages the seller to use an agent but she is not required to do so. She provides photos and property information such as house type, square footage, number of bedrooms/bathrooms, features, roof type and history, flooring, any major remodeling, painting history, age of appliances, HOA status, etc.
Zillow then presents the home description and photos to 15 Wall Street investors who are either licensed brokers (e.g.. Berkshire Hathaway) or who use a third party broker license and to participating Zillow Premiere Agents who are asked to provide a current market analysis (CMA) of the property. All the investors/premier agents are given 24 hours to submit their ALL CASH ONLY offers directly to the seller. The offers expire in 5 days.
Offers are managed by a dotloop that connects sellers and investors/agents in creating a file for a potential deal. The investors/agents can use standard forms/docs or their own. Zillow requires that the final agreement be posted in the loop.
The investors/agents are entitled to a home inspection with the expectation that the home inspection takes place within 24 hours of the parties reaching an agreement.
The pros for the seller…
- There is no listing preparation.
- The transaction is all cash.
- There are no open houses.
- The closing date is the seller’s choice.
The options for the seller…
- The seller can accept and sell directly to an investor/agent.
- The seller can use an agent to manage and close the transaction.
- The seller can reject all offers from investors/agents and then list the property on MLS with an agent.
Whether or not this iteration of Zillow’s iBuyer program takes off continues to be up in the air. However, the fact that the test markets which began in just Orlando and Las Vegas are now in Phoenix as well. This addition tells us to pay attention to this Instant Offers program and to how Zillow deals with 70% of its current revenue stream, real estate agents.