On the same day that Zillow announced its becoming a full fledged iBuyer under its auspices of InstantOffers, OfferPad severed its ties with Zillow.
OfferPad, a privately held iBuyer startup launched in 2015 aiming to make the sales process faster and easier by giving online sellers cash offers for their homes within 24 hours with or without an agent, became one of two named investors in Zillow’s InstantOffers program when it launched in 2017. At that time, Zillow via InstantOffers was not making its own cash offers on homes.
Now, things have changed and Zillow via InstantOffers is, in fact, making its own cash offers on homes. Now, OfferPad and Zillow via InstantOffers are in direct competition with each other. And now, OfferPad indicated that it was totally blindsided, essentially knew nothing about Zillow’s intention to become a full-fledged iBuyer via InstantOffers.
However and whenever these entities communicated with each other is now past tense. Zillow via InstantOffers is going full steam ahead into Phoenix while continuing to operate in Las Vegas and Orlando. In a press release, Zillow stated that, “We think there is plenty of room for a competitive market and believe we’ll succeed in this space because we keep agents at the center of the transaction…We believe Zillow will differentiated itself to sellers by providing more accurate pricing, superior customer service and the knowledge that they will be working with a trusted, consumer-first company, something we’ve built over the last 12 years.”
OfferPad “…anticipates little or no impact on (its) business since ending (its) partnership (with Zillow). Less than 1% of (our) overall volume came from Zillow.”
OfferPad continues to operate in Atlanta, Charlotte, Los Angeles, Orlando, Phoenix, Salt Lake and Tampa. Its expansion plans include Houston and Nashville. Its business model distinguishes itself by enabling sellers to pinpoint and choose their closing dates. The business claims that its average closing period of 22 days is shorter than the industry average.
The court of public opinion quickly weighed into Zillow’s announcement of its new iBuyer status via InstantOffers. Zillow, a publicly traded company, watched its stock fall 10% the day after its announcement. Additionally, real estate professionals wonder about Zillow’s ability to expand its branding recognition as a well-known real estate listing portal to a relatively unknown home buyer/seller.