<\/span><\/h2>\n\n\n\nZillow Offers might be touted as a great, new, easy way to sell a home with less hassle, but make no mistake about it;. They are in the business of making money, at least generating revenue. Zillow made over 40% of their revenue from buying and selling homes according to their most recent financial reports.<\/p>\n\n\n\n
How are they doing this? They are buying thousands of properties, investing in minor repairs, and selling them for a profit. Despite their claim that they are not in the business of flipping homes, the fact remains \u2013 Zillow Offers are substantially lower than the market value of the home, and they look to sell their newly acquired home within 90 days.<\/p>\n\n\n\n
Zillow also brings in a considerable revenue from the fees they charge homeowners for the convenience of a quick sale.<\/p>\n\n\n\n
How much of a fee? According to Zillow that convenience fee can be 10-15% of the home\u2019s value, or higher, depending on the home, market conditions and other factors. Zillow charges homeowner the same as a traditional sale for what they call “Selling Costs” and describe it as this: This covers the transaction costs of buying your home, and the prep cost of listing and selling your home after you move out. This includes the buyer\u2019s agent commission.<\/em> On top of this cost they charge a 1-2% “Closing Cost” which is described as “This is an estimated cost that includes title, escrow, and transfer tax, typical in a traditional sale.”<\/em> Then finally there is a 1-3.7% “Zillow Service Charge” which they say is “Our fee covers the cost of home ownership before resale including taxes, maintenance, and utilities, as well as the potential risks associated with the sale.<\/em>“<\/p>\n\n\n\nThe lumping on of these closing costs are the one place traditional wholesalers and investors can beat Zillow Offers on easily. Most negotiations with sellers to buy a property at a deep discount include no closing costs. Investors and wholesalers typically pay all closing costs as incentive for a deep discount on the property. No investors would charge anything like a “Service Charge” or get away with it unless the seller was extremely distressed. It just doesn’t work that way.<\/p>\n\n\n\n
<\/span>Zillow Offers Results to Date<\/span><\/h2>\n\n\n\nDespite providing for close to half of Zillow\u2019s overall revenue, Zillow Offers is still far from profitable for the company. The huge overhead of purchasing homes that do not immediately sell places a strain on the balance sheet. In Q3 Zillow purchased 2291 homes, while only selling 1211 of them. <\/p>\n\n\n\n
Zillow\u2019s push into the iBuyer market hasn\u2019t gone unnoticed by its industry rivals. Market leader, Opendoor, purchased almost 10,000 homes last year between January \u2013 July. Compared to Zillow, Opendoor purchased 4.7 times the number of homes that Zillow did in the month of January. As Zillow accelerated its entry into new local markets this lead fell to 2.4 times. With the current plans for expansion not stopping any time soon it looks as though Zillow will close the gap even more in 2020.<\/p>\n\n\n\n
<\/span>Final Thoughts on Zillow Offers<\/span><\/h2>\n\n\n\nZillow is leading the charge of becoming the largest iBuyer in the market. They are capitalizing on brand recognition to accelerate the buying of properties at discount prices. People have grown to love the brand and when they are looking to sell fast they are turning to their favorite real estate brand to save the day. Zillow is more than happy to gobble up your heavily discounted real estate as fast as possible. In the markets they are operating in mom & pop investors know there\u2019s a new 800 lb Gorilla in the room when making offers. Zillow Offers is in it\u2019s infancy stage and should not be dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"
Zillow Offers is the latest arm of the wildly popular real estate brand Zillow.com. Zillow Offers is the latest attempt by Zillow.com to monetize their traffic as leaders of real estate web traffic. Currently Zillow.com is…<\/p>\n","protected":false},"author":14,"featured_media":1167,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[178,184,183],"class_list":["post-1146","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-articles","tag-zillow","tag-zillow-instant-offers","tag-zillow-offers"],"_links":{"self":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/1146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/comments?post=1146"}],"version-history":[{"count":27,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/1146\/revisions"}],"predecessor-version":[{"id":6519,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/1146\/revisions\/6519"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/media\/1167"}],"wp:attachment":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/media?parent=1146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/categories?post=1146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/tags?post=1146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}