Zillow Offers Review
In the Fall of 2018 I wrote a blog post entitled
, "Good News For Sellers: Zillow Is Buying Homes. Is it good news though?" As the post went, "As someone who has been in a sales role for most of my adult life, I have developed a 'sixth sense' over the years and feel the 'hairs on my neck get tingly' when someone is selling me something. Zillow is getting into the same business as Open Door, Offerpad, and others who want to buy your home with 'no fuss, no showings, and offering you the ability to start packing today!"
Over this past few months I've noticed Zillow making good on their promise to bring Zillow offers into the Atlanta market. From Zillow.com to friendly billboards along the interstates around Atlanta, GA they boast of buying homes and making your life, as a seller, easy. They note the big attraction to selling your home to Zillow being;
- No showings or open houses
- We take care of prep and repairs
- Sell on your schedule
That's all well and good, but one thing I've tried to convey to sellers everywhere is that as we are in one of the hottest housing markets nationally and in a sellers' market, homes don't last long before going under contract. The average seller today is not showing their house that long before offers start flooding in. Yes, Zillow will take care of prep and repairs, after you sell to them at steeply discounted pricing, but what I have an issue with is the sales tactics they take on an unwary consumer. As I mentioned in a post I did in on Offerpad, "I would stress to the consumer that neither Offerpad nor any investor (insert: Zillow) is a benevolent organization looking to get you top dollar on the sale of your home. When that investor comes in to inspect, anything they find will be cause a huge reduction to an offer price already agreed to based on how well you are able to describe your house to Offerpad online. Don't be fooled."
So being a good student of my business, I wanted to see what the consumer sees when receiving and going through the initial stages of the Zillow Offers process. What I used as a real life subject for this review is a listing I had pending at 941 Providence Dr, Lawrenceville, GA. You may find the Zillow listing for this at https://www.zillow.com/homedetails/941-Providence-Dr-Lawrenceville-GA-30044/14709241_zpid/.
Comparison between Zillow Offers and selling through an agent to the open market
This listing took 13 days to go under contract. It closed 48 days from the original listing date. The home was listed at $279,900. Please feel free to view the home's virtual tour here. In that 13 days of marketing the home, prior to going binding or under contract, we had 15 showings. I don't do Open Houses, so we had none. Now after going through Zillow's offer request process on their site, I received a call within 24 hours from a gentleman on the West Coast who I am sure knows a lot about Atlanta real estate. He got some details from me. I explained I was looking for a back up offer on this pending listing and uploaded original listing photos showing the best qualities in the home.
What I received was an email from Zillow that said in the subject line, "Good news! Your offer is here."
In the email there was the following link to the offer;
Also, the Zillow offer price; MARKET VALUE
This is really where it got interesting. They broke down the net to the seller further
EST. CASH PROCEEDS
This is the estimated cash you will receive after closing costs.
What I found most interesting is the breakdown comparison the offer link showed, which compared the Zillow Offer
to the home if Listed for Sale by an Agent
. This in effect is where the unwary seller might just get lead astray! They show an assumption that the Zillow Offer and a sale by an Agent would obtain the same sales price
of $258,600. They then break down fees. For Zillow Offers the fee break down looked as follows;
Est. total selling costs
9.2%**DON'T MISS THIS!
Zillow service fee
Est. prep and repair
Est. closing costs
Est. cash proceeds
They also note at the bottom of the comparison, "*Zillow's offer is subject to a home evaluation. Repair costs may be adjusted if the evaluation identifies additional needed repairs. Choose any closing date within 7-90 days of final offer acceptance. Estimates are based on public and private data." So that repair cost could be more.
For the Agent sale (in their comparison) they note the following;
Est. total selling costs
Est. cash proceeds
So even by their numbers, you're better off selling your home with an agent by close to $4,000 or roughly 1.6%. Now here's the rest they don't share with you. Average days on the market in Metro Atlanta are between 17-28 days depending on which county or town you might be considering. I can look back over the past six (6) months and give you a pretty well defined idea of how long the selling time frame might be. That "Unpredictable" time frame to sell with an agent is nonsense.
When you look at the actual closing price, repairs, and fees to the seller
on this house, 941 Providence Dr, Lawrenceville, GA actually sold for $279,000
. After seller concessions agreed to in the contract they were at $272,000. If we look at repairs, knowing what actual repairs were made on the property based on actual inspections during due diligence, the sellers spent about $717. Not the Zillow estimate of $3,371. Also, because these sellers were buying a home from me too I lowered the commission to 4.5% on their sale.
This means instead of walking away with $234,800 at closing using Zillow's faulty assumptions, my client walked away from closing with $259,043, which was MORE THAN THE ZILLOW OFFER prior to fees!?!
If you'd like to discuss your home and what I could do for you, please don't hesitate to reach out to me. Contact me on my cell at 706-621-1895 or email me at email@example.com
. It would be my pleasure to hear from you and find out what I can do to help you!