Zillow Offers is an iBuyer that’s operated by the popular real estate search website. iBuyers purchase homes for cash, typically for slightly below market value. However, sellers who work with iBuyers don’t have to worry about trying to find a buyer and can complete their sale on their own schedule.
There are a number of iBuyers operating across the United States. Zillow Offers is the second-largest based on transaction volume. While it temporarily paused purchasing homes in March of 2020 due to the COVID-19 pandemic, it resumed operations in May of the same year.
Homeowners in select markets now have the option to sell their home to Zillow, but should they?
Read on to learn where Zillow’s iBuying business operates and what’s involved in working with it if you’re either a buyer or a seller.
Not sold on Zillow Offers? Try Clever Real Estate, which can connect you with an agent who will list your home for just $3,000 or 1% of your home’s value. This could be much more affordable than selling your property to Zillow Offers.
What is Zillow Offers?
Zillow Offers is an iBuyer wing of the Zillow Group. Between Zillow.com and Trulia.com (also owned by Zillow), Zillow Group accounts for nearly 64% of the entire online market share for buyer traffic (and leads), giving them massive reach in the real estate industry.
Like other iBuyers, Zillow Offers makes an all cash offer to home sellers to purchase their properties. Zillow began offering this service in 2018 to compete with other companies such as Opendoor — the largest iBuyer in the United States.
Zillow Offers is very similar to other iBuyers. Like most of its competitors:
- It makes an offer quickly upon request (48 hours).
- It takes care of any necessary home repairs but deducts the cost of them from your offer.
- You won’t have to hire a real estate agent to sell your property. You can submit a request for an offer yourself without paying commission to a listing agent. However, Zillow charges 6% selling fees, which is equivalent to what you pay in agent commissions in a traditional real estate transaction.
- You won’t have to make your home ready for open houses or showings.
- You can close on your property when you want and won’t have the uncertainty of waiting for a buyer to come along.
There’s a cost to this convenience. In fact, you’ll both pay Zillow a fee for buying your home and are likely to get a lower price for your home. The company charges a service fee between 1.5% and 9% (2.5%, on average) and selling costs of 6%.
A study conducted by Mike DelPrete revealed OpenDoor and Zillow paid approximately 1.4% below fair market value.
The chart below shows what selling a home valued at $500,000 could look like if you sold to Zillow offers versus a conventional sale. NOTE: It doesn’t take into account any repair costs or closing costs.
|Cost||Zillow Offers||Traditional Sale|
|Real Estate Commission||$0||$30,000|
|Zillow Selling Costs||$29,000||$0|
There’s a lot of variation in the final amount you’d receive from Zillow Offers due to the extent its fees vary from market to market. The area where your property is located makes a big impact on whether using Zillow offers is worth it.
If these fees seem high to you, you have alternatives.
Clever can connect you with a full service agent who will help you get top-dollar for your home from a traditional buyer. Clever partner agents charge just $3,000 or 1% commission, not including the fees paid to a buyer’s agent.
Zillow Offers vs. Other iBuyers
Although Zillow has many similarities with other iBuyers, there’s one major difference: Zillow encourages its Premier Agents to use the iBuyer program. Zillow Premier Agents are real estate professionals who pay a fee to Zillow to connect with buyers using its search features.
Other iBuyers help customers sell their house without an agent, but Zillow still actively works with agents while buying homes.
This doesn’t mean you need an agent to request an offer from Zillow. And, if you do have an agent who requests an offer for you, you’ll pay your agent’s commission on top of the fees Zillow charges. This can make your transaction even more expensive as your listing agent typically collects a commission of 2.5% to 3%.
How Zillow Offers Works
The process of selling your home to Zillow Offers is simple and involves just four steps:
- Request an offer online: This is as simple as entering your property’s full address and providing some basic information.
- Receive an offer within two days: Some iBuyers provide instant offers or get back to you within 24 hours, but Zillow Offers will contact you within 48 hours.
- Schedule a home inspection: Zillow’s inspectors will identify any repairs or defects that impact the property’s value.
- Review and accept the final offer: The offer will be reduced by the amount Zillow deems necessary for repairs.
Your agent can request a Zillow Offer for you if you’ve signed an agreement with a listing agent — but keep in mind that this means you’d owe them an additional commission in addition to the Zillow Offers fees.
Buying a Home From Zillow Offers
When you browse Zillow as a buyer, you may come across homes owned by Zillow. If you do, the process of purchasing these homes is streamlined compared to working with a seller in a conventional transaction. Specifically:
- You can submit an offer for the property and get a reply within just 48 hours.
- Your closing date is based on your schedule, rather than on a timetable that works for both you and the seller.
- The home is vacant so you can move in more quickly.
Zillow pays the commission to your agent if you have one. This is similar to a conventional transaction as buyers never pay their agents — sellers do.
Zillow Offers Fees
As a seller, the biggest downside of working with Zillow Offers is the fees the company charges. While these fees vary by market, there are a number of costs you’ll face with Zillow offers that you wouldn’t incur in a traditional home sale. These include:
- A service fee for working with the company
- A fee for “selling costs” which covers the company’s expenses and pays the commission to a buyer’s agent when Zillow resells the home
The chart below shows all of the different expenses you could incur when selling your home to Zillow versus a traditional agent. It does not include closing costs or repairs.
|Fee/cost||Zillow Offers||Traditional sale|
|Service fee||1.4-9% (2.5%, on average)||n/a|
|Realtor commission||n/a||6% (split between buyer's and seller's agents)|
As you can see, Zillow’s fees are higher than those you’d incur in a conventional sale. They are also higher than those charged by many other iBuyers. Opendoor, for example, charges fees between 5.5% and 10% total when you sell your home to them.
Still, because there is a lot of variation in the fees you could owe with Zillow, it’s best to submit your home for an offer directly. You may be in a market where fees are low, and there’s no obligation or cost to ask, so it’s worth checking.
Pros and Cons of Selling to Zillow Offers
If you’re considering selling your home to Zillow Offers, it’s important to carefully weigh the benefits versus the disadvantages.
Pros of Selling to Zillow Offers
- You can obtain a free, no obligation offer: This gives you an idea of what your home is worth so you can decide if you’re happy with the price Zillow is willing to pay.
- You can pick your closing date: You can move out when you want, not on a seller’s schedule.
- You’ll be assigned a dedicated ZIllow Offers Advisor: They’ll walk you through the entire process.
- You don’t have to handle repairs yourself: There’s no searching for contractors or living with remodeling going on around you. Zillow simply subtracts for the cost of repairs.
- You don’t have to show your property. There’s no need to declutter and clean and have it ready on a moment’s notice for a visit from a potential buyer.
Cons of Selling to Zillow Offers
- You lose the opportunity to negotiate: Zillow Offers are generally take-it-or-leave it while you could negotiate the best price from a buyer in a conventional transaction.
- Not all houses are eligible: Your property must meet certain criteria to be eligible for purchase.
- Limited market availability: Zillow Offers operates only in select locations throughout the United States.
- Fees can be high: You may pay as much as 15% of your home’s value in transaction costs.
- You may get less than fair market value: iBuyers usually pay slightly below what your home is worth.
Pros and Cons of Buying from Zillow Offers
Pros of Buying from Zillow Offers
- Homes are move-in ready: Zillow has identified and handled any home repairs as part of the purchase process.
- Flexible closing date: You can move in on your schedule, rather than waiting for a seller to be ready to vacate.
- Sale isn’t contingent: Some sellers will make their sale contingent on their ability to first find a new home to move into.
- Seeing a property is simple: You can arrange a self-guided tour via the Zillow App, and virtual tours are also available.
- Timely responses to offers: You’ll hear back within 48 hours of making an offer on a property.
Cons of Buying from Zillow Offers
- Limited negotiations: Zillow is typically more firm on pricing than a homeowner selling his or her own property would be.
- Zillow likely won’t agree to extra repairs: You’d have more leverage in a conventional transaction.
Zillow Offers Locations
Zillow operates in a limited number of markets. They include:
- Atlanta, GA
- Austin, TX
- Charlotte, NC
- Cincinnati, OH
- Colorado Springs, CO
- Dallas-Fort Worth, TX
- Tampa, FL
- Tucson, AZ
Zillow has indicated it is expanding the Zillow Offers program. You can use a form on Zillow’s website to claim your address and receive an alert if the company becomes interested in purchasing properties in your area.
Zillow Offers Reviews
Unfortunately, one of the biggest downsides of working with Zillow Offers is that there are no verified customer reviews on third party websites. That makes it difficult to determine the experience past buyers and sellers have had with the company.
While the Zillow website does have testimonials, they’re obviously curated by the company so aren’t objective.
Still, you can submit a request for an offer for free with no obligation, so there’s little downside to doing so. Just be aware that the final offer may not match the initial estimate you received as it’s likely that Zillow will identify some repairs needed and make deductions.
Alternatives to Zillow Offers
There are many alternatives to Zillow Offers. These include companies such as:
Zillow Offers stands out from other iBuyers because its fees are among the highest of any of these companies. However, unlike some competitors, Zillow doesn’t charge a cancellation fee if you decide not to go through with the sale.
Opendoor vs. Zillow Offers
Although both Opendoor and Zillow Offers will purchase your home for cash, there are important differences between the two companies. The chart below highlights some of the key differences.
|Share of iBuyer Market in 2020||26% (Source: Mike DelPrete)||50% (Source: Mike DelPrete)|
|Number of Markets||25||23|
|Time to Receive Offer||48 Hours||24 Hours|
|Additional Services||Zillow Home Loans, Zillow Closing Services||Opendoor Trade-in, Builder Trade-up, Opendoor Home Loans|
Other Zillow Incentives and Services
Zillow offers a number of services that can help streamline your transaction, whether you’re buying or selling with the company. These include Zillow Home Loans for buyers and Zillow Closing Services.
Customers aren’t required to use Zillow Home Loans or Zillow Closing Services when they work with Zillow Offers. In fact, you may be able to get better rates by shopping around to find the best price.
Zillow Home Loans
Zillow has partnered with a nationwide network of mortgage lenders to help buyers secure loans to purchase properties. Buyers can get pre-qualified for loans at competitive rates within minutes.
Buyers who purchase Zillow-owned homes and also obtain a loan through a Zillow partner lender will receive up to a $1,500 lender credit.
Zillow Closing Services
Closing on a real estate transaction requires using an escrow or title company.
These companies collect and hold the buyer’s deposit and arrange the exchange of funds necessary to complete the sale. Title companies also conduct a search for liens or claims on the property and provide title insurance.
With Zillow Closing Services, these key steps are integrated so buyers and sellers can have a more streamlined experience.
Contact Zillow Offers
|Phone||1 (833) 963-3377|
FAQs About Zillow Offers
What is Zillow Offers?
Zillow Offers is Zillow's iBuying program. Zillow Offers purchases houses and then resells them on the open market. This allows home sellers to sell their homes quickly by getting all-cash offers.
Is Zillow still buying homes?
Yes, Zillow Offers is still buying homes. Zillow briefly paused homebuying in the spring of 2020 due to the COVID-19 pandemic, but they began purchasing again after a three-month pause.
How much does Zillow Offers cost?
Zillow Offers charges a service fee that ranges from 1.5-9%, but the average charge is 2.5%. However, Zillow also charges 6% "selling costs" to help them cover the costs of holding and reselling a home.
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