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On Thursday, the company announced a new feature to streamline the process for owners considering selling to Zillow.
For some homes, Zillow’s “Zestimate” – the online estimate of the home’s value – will now represent an initial cash offer from the company to purchase the property. This could mean an even faster timeline for homeowners who want to close a sale without having to worry about a formal listing, or a useful data source for potential sellers who want to know how much money they’ll have to buy their next one. . to house.
“It’s about taking these steps to more of that one-click nirvana,” COO Jeremy Wacksman told CNN Business. “(It’s) about making the real estate transaction experience more transparent, easier, more integrated.”
Zillow Deals has been around since 2018 and is now available in 25 markets across the country, ranging from Tampa, Florida to Fort Collins, Colorado. Typically, owners of these locations can submit a questionnaire and, in some cases, photos of their home., and will receive an initial cash offer from Zillow within a few days. With the new Zestimate cash offer feature, eligible owners can skip this process.
From there the transaction works the same as with other Zillow offers – a Zillow employee inspects the home, provides a list of needed repairs and an adjusted final offer, and the owner can choose a closing date. Zillow charges sellers a commission of around 7.5% on average.
Zestimate’s initial cash offers will be available in 23 markets to begin with. For a growing set of properties in these markets, Zillow has enough data on the house and others like it to feel confident in making Zestimate its initial cash offering, Wacksman said. For example, if you live in an area where all the houses are the same and where many have been recently sold, Zillow would have an easier time figuring out an accurate estimate for your home.
The real estate world has sometimes criticized Zestimates and other online home valuation tools for not representing the true market value of a property. But Zillow says its pricing algorithm is reliable. For homeowners who decline Zillow’s cash offer, the difference between Zillow’s offer and what they end up selling for is usually less than 1%, Wacksman said.
“Our goal is to offer deals at market value and get the Zestimate for exactly what your home is worth,” he said. “And then we take care of the sales process if you don’t want to do all of that work yourself.”
Zillow’s home buying and selling business has grown rapidly since launching just over two years ago, but it is not yet profitable. In 2020, the segment generated $ 1.7 billion in revenue, but recorded a loss of over $ 320 million. But Wacksman said the company is focusing more on growing the business. than making a profit at this point, trying to scale it to where Zillow can cover fixed costs and increase profit margins on each home and adjoining services, like mortgages.
“We are still in investment and growth mode,” he said. “(Right now) we’re trying to balance out on every unit… we’re trying to bid at market value for what it costs us to buy and sell homes.
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