Now that ZillowOffers is defunct and Zillow canceled 400 contracts set to close through late 2022, surprise – 400 sellers will have to sell their homes another way.
Zillow Cancels 400 of Some 8,172 Contracts with Home Sellers Nationwide
Zillow’s ZillowOffers iBuying saga continues. After announcing that the company would shut down its iBuying arm, ZillowOffers, in early November, Zillow management “vowed” to honor the company’s outstanding purchase agreements.
Just recently, according to the Phoenix Business Journal, Zillow canceled 400 of approximately 8,172 contracts with home sellers nationwide. Home sellers involved with these now canceled contracts are supposed to receive compensation for the canceled contracts that is to include earnest money and varying bonuses for agreeing to terminate their respective contracts by November 30, 2021.
The Journal wrote that the majority of these homeowners seem to have been waiting on new homes that are not yet completed.
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Plight of Homeowners
One homeowner in Georgia said, “We went to Zillow because they (Zillow) told us that they were a preferred partner of Minto Properties, the building contractor in Florida. Our estimated closing for the new property is between January 2022 and March 2022, so Zillow put our closing date as February 18, 2022, for contract purposes only. They told us we could close at any time when the Florida property was ready – earlier than this date or later; no worries.”
The home seller continued. “We tried to change our closing date to December 31, 2021, or even in January, but she (the Zillow representative) said that nothing could be changed.”
By the way, Zillow had agreed to pay the home seller $351,085 for this property. Zillow had offered this home seller a total of $3,500 for canceling the contract…$1,000 for a deposit and $2,500 for a bonus.
Another home seller, this time a couple in Arizona, was offered $10,000 for canceling the contract on their 1,580 square-foot home. Zillow had been set to pay the couple $418,872 for their home. One of the two in the couple said, “We expected them (Zillow) to uphold their end of the deal. We thought this was a done deal.”
Matt Kreamer, a spokesperson for Zillow, told the Phoenix Business Journal that Zillow is doing its best to compensate home sellers for the inconvenience of this situation of canceled contracts. Kreamer also told the Journal that the company foresees no additional contract cancellations.
Kreamer said, “For a small subset of customers closing later in 2022, we determined we can no longer support their closing and are releasing our earnest money to them.”
Thanks to the Phoenix Business Journal and Inman.