The real estate market has turned sluggish recently, requiring real estate companies like Zillow to rethink their selling and pricing strategies. As innovation would have it, Zillow has been using a new approach that thus far has been a rousing success for both the company and for homeowners who are looking to sell their homes.
Whether you are a first time seller or an experienced and hardened negotiator, the traditional process of selling a house is steeped in tons of paperwork and significant amounts of time. There are the open house shows that require you to disrupt your week. Once a buyer shows some serious interest, then there is the consultation with the real estate agent and making the decision whether the offer is acceptable for the value of the house. Then there is waiting for the buyer financing to clear the many hurdles needed to close the deal.
Zillow has created a program where a Zillow agent will make you an offer you can refuse, but refusal will likely mean you will repeat the above house selling process ad nauseum. The basics of the Zillow Offers program are a homeowner will list their house for sale on Zillow. The homeowner will then have the opportunity to fill out a form providing specific details of the home for sale and submitting it online to a Zillow agent. After carefully reviewing the form, the homeowner will be notified whether the house qualifies for the Zillow Offers program and receives an offer to buy the home for a specific amount of cash. If the homeowner accepts, they will receive the cash in a matter of days and can move on with their lives.
The Zillow agent will then take the responsibility for arranging the open house events and every other aspect regarding the final sale of the home. This has led to some suspicion of the part of potential sellers because Zillow may be lowballing on the offer in order to make a considerable profit. However, Zillow says there is not ulterior motive for making the offer and buying the house, other than to make the process easier for both the seller and future buyer.
Now the program is currently planned only to be available in limited markets: Atlanta, Denver, Phoenix, and Las Vegas have working programs, while Charlotte and Raleigh, North Carolina are in the works for winter availability. These are some of the more geographically active areas for home selling and buying, and if the data shows it can be convenient and profitable for everyone, it could become a standard offering from Zillow everywhere.
This may the exactly the ticket Zillow needs to make a major move to grow its brand online and in the general real estate market. The program can be used in both hot and cold real estate markets because homeowners in general want to move on with their lives once they have decided to sell their homes. It is important to realize that not every home qualifies for the Zillow Offers program, so it is likely that only the properties that are in the greatest demand will find the owners walking away with a pile of cash. From Zillow’s perspective, homes in areas of high demand are likely to sell quickly, so agents will not have to spend much time selling it or be saddled with a property for months on end, waiting for a buyer to help them break even on the deal.
One important economic factor that directly affects the program is the number of Baby Boomers who are looking to move into a smaller place now that their children are grown and gone. Over the last couple of decades, children have opted to stay at home much longer than previous generations, preventing dad and mom from selling and moving on. The money from the sale of the home can be used for retirement. But this trend is not going to last for many more years as once the Baby Boom generation has passed on, these opportunities will dry up.
It seems Zillow has found a way to make both seller and buyer happy by minimizing the amount of time it takes to complete the process. There will still be forms to complete and waiting time to endure, but the Zillow Offers program removes most of these irritations from the buyer and has the agent take over. If you live in a high real estate activity area, this program may be coming to your area sooner than later.